ECONOMY

Serb oil sector cleanup

BELGRADE (Reuters) – Serbia’s finance minister told energy companies yesterday the State will continue to control illegal crude oil trade and make further efforts to boost the competitiveness of its oil monopoly. «Your sector has long been ruled by the mafia. Their earnings were six to seven times those from an illicit cigarette trade,» Bozidar Djelic told an annual meeting of the Serbian and Montenegrin Association of Crude Oil and Gas companies. «Due to the sector’s nature, its full liberalization will not take place in the next three years,» he said and added that the fight against the mafia had cleansed the streets of petrol peddlers. Last week, Serbia lifted a crude oil imports ban for the private sector, but kept the ban on refined oil products, seen as threatening the monopoly of Naftna Industrija Srbije (NIS), which has yet to restructure and privatize. According to the decree, individual importers can bring in up to 25 percent of the total quantity of crude needed for one year. The crude will be processed at NIS’s two refineries. While the government said the decree would tighten competition in the sector, improve the quality of products and likely lead to lower prices, NIS feared it would affect its business. Djelic said the government would, within 18 months, prepare a restructuring and privatization plan for NIS to make it more efficient and competitive, but would not elaborate. «A lack of competitiveness, both in NIS’s upstream and downstream activities, cost public finances 20-30 billion dinars ($518.2 million) a year. Trade unions interpret restructuring as layoffs. For me, it means greater competitiveness,» he said. NIS is one of 50 state-held conglomerates which the government must first break up and then rid of a bad debt before selling to strategic investors.