Counter-spin: The Spinning of Nikoloski about the Fuel Excise Duty is Completely Unsupported

The facts show that it would be legitimate for the Government to resort to increasing fuel excise duties as an anti-crisis measure. The claims of the opposition that this is a measure intended to enrich the oligarchy, military profiteering or the possibility of inflation are completely unsupported spins

Author: Teofil Blaževski

Aleksandar Nikoloski, Vice President of VMRO-DPMNE, in a conversation with Kanal 5, among other things, spoke about the proposal to increase fuel excise duties, and by twisting the truth, i.e. spinning, assessed the proposal as a measure intended for the country’s oligarchs.

Spin: The request to increase the excise duty should be rejected… This measure applies only to a few oligarchs in Macedonia, who, I know, have high expenditures, for example, they have several Mercedes cars that need to be maintained annually, and they have several villas in both Macedonia and Chalkidiki… This is unacceptable, the enrichment of the oligarchy in times of crisis is nothing but profiteering from the suffering of the people.

[Source: Kanal 5/ VMRO-DPMNE – A. Nikoloski – date: 15 April 2020]

Counter-spin:

After this proposal was made by the Macedonian Chamber of Commerce last week, the VMRO-DPMNE party rejected it several times and assessed it as scandalous, but like Nikoloski, without any relevant fact as an argument. The only thing that was stated at a press conference by the party’s spokesman Igor Janušev is that it would contribute to inflation while using qualifications such as “cronyism” and “military profiteering”.

VMRO-DPMNE does not support war profiteering, i.e. cronyism that will increase the excise duty on fuel, and thus directly increase the price of many products contributing to a more expensive life. (I.Janušev, press)

The facts speak for themselves. For example, it is indisputable that the budget deficit will be large, so it is necessary to use all available means to fill that gap in various ways. It is also an indisputable fact that the budget has always been filled by citizens and companies, whether directly from their taxes or through other extra incomes such as excise duty. As a matter of fact, the price of oil derivatives has dropped dramatically due to the fall in the price of crude oil on world markets – from about $ 50 a barrel before the crisis, to below $20, as it is today.

Due to that, both the fuels and derivatives have undergone a significant price fall from nearly 70 denars per liter to 45-48 denars as they are now, and with this continuous price fall of crude oil, these prices will also continue to fall. This is supported by the fact that consumption has decreased due to restrictive measures for population movement and due to the reduced economic activity of companies.

If these facts are irrefutable, then why so much opposition to the increase in excise duty? The income on that basis is reduced due to reduced consumption anyhow, and it is not a big problem even if it is a matter of a commissioned proposal from the Government to the Chamber of Commerce.

The calculations given by the proposer are not to be underestimated. The request states that the annual flow in the state treasury in this way would be over 45 million Euros or close to 4 million Euros more per month:

“The existing excise duty on unleaded petrol should be increased by two denars to the amount of 23.692 denars, the excise duty on gas oil used as a fuel (Eurodiesel fuel) should be increased by two denars to the amount of 17.121 denars, while the excise duty on gas oil used as a heating fuel should be equalized with the excise duty on diesel fuel, i.e. to be 17.121 denars. With the proposed measures, on the basis of excises and VAT from the sale of oil derivatives, on a monthly basis would be collected funds larger by 3.8 million Euros, or 46.2 million Euros per year.” (Tatjana šterjova PhD)

The only thing related to the “oligarchs” mentioned by Nikoloski may be the second part of the proposal to change the Rulebook on the highest retail prices of derivatives, where instead of the highest trade margin to be 5.6 denars per liter, to range from 5.38 to 5.8 denars. However, neither Nikoloski, nor anyone else from VMRO-DPMNE, nor any of the experts, stated what this means and whether this proposal would enrich the oligarchs. Ultimately, the government does not have to adopt this part of the proposal, but can only stick to the excise duty.

And finally, some words on the only, at first glance, reasonable argument mentioned by Janušev – the possibility of inflation. This possibility is almost ruled out. Just over two years ago, in November 2017, the Government, through the Ministry of Economy, decided to increase the excise duty on diesel by over 3 denars. Aside from the explanation, which referred to the “European recommendations” and the lowest price of diesel in Europe, there was no inflation, even with the then price of over 70 denars per liter. VMRO-DPMNE demanded the immediate abolition of this excise duty, something that was coldly refused by the then Minister Dragan Tevdovski. Now, however, with reduced fuel prices of over 20 denars per liter, it is even less likely that transporters or manufacturers will increase the prices of services and products.

Therefore, due to the stated facts, there is no doubt that Nikoloski’s “arguments” for a measure that “would enrich the oligarchy while the people are suffering” are a distortion of the truth or a spin, even an atypical one, because it does not contain any argument or even partial argument to support such a claim.

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