Serbia to set oil tariffs
BELGRADE (Reuters) – Serbia will replace its ban on oil product imports in September with a tariff that will gradually be lowered to promote competition, it said yesterday. Serbia banned free imports of refined oil products in 2001, initially as a six-month measure to fight peddling of petrol, but extended the policy until the end of 2010 to make the country’s NIS oil monopoly more attractive to potential buyers. The International Monetary Fund and analysts have said a tariff would protect NIS from competition just as efficiently, prompting the decision to drop the ban by means of an amendment of the customs tariff law. «We could not have lifted the ban without establishing a mechanism of gradual reduction of customs tariffs,» Deputy Energy Minister Slobodan Sokolovic told a news conference. «The system will be adopted in September and the tariffs will be reduced by 2012 down to European Union levels,» he said. Because of the ban, fuel retailers in Serbia rely on NIS refineries in Novi Sad and Pancevo for all the petrol or diesel fuel that they sell. According to NIS, Serbia consumes some 3.0 million tons of oil products a year. The protection of NIS, the region’s last fully state-run oil company, is considered essential ahead of the sale, which is due to start by October. So far, Raiffeisen Investment and Merrill Lynch, who advise the government on the NIS privatization strategy and overall oil sector reform, have had contacts with Hellenic Petroleum, OMV, MOL, PKN Orlen, Lukoil and an Israeli oil company. According to the privatization plan, detailed by Raiffeisen Investment yesterday, the government will initially put up for sale a 25 percent stake in NIS and earn at least $300 million, based on its $1.2 billion nominal value. The buyer would get another 12.5 percent stake through a $250 million capital increase, Rados Ilincic of Raiffeisen International said. The buyer would also have to reinvest a further $250 million from NIS profits over three years. «The focus is on investment, because NIS is a downstream company, depending on refineries rather than oil exploration,» Ilincic told the news conference. By early 2007, the state and the buyer would each hold a 37.5 percent stake. The buyer would get management control while Serbia would keep a right to veto decisions, such as a sale of NIS to third parties, he said. Three years later, NIS would launch an initial public offering (IPO), putting up for sale 15 percent of its total capital. Following the IPO, the initial buyer will have the chance to boost its holding to 49 percent, depending on the three-year performance, Ilincic said. Sokolovic said that if the buyer fails to meet the investment schedule, the government could sell control to another strategic partner.
