Emergency VAT cut aims to stabilize pump prices as global oil markets react to escalating Middle East tensions….
In a swift move to ease pressure on motorists and businesses, North Macedonia has announced a sharp reduction in fuel taxes as global oil markets remain volatile amidst the ongoing conflict in the Middle East.
The government confirmed on Sunday that value-added tax (VAT) on petrol and diesel will be nearly halved from 18 percent to 10 percent in a temporary measure designed to cushion the impact of rising energy costs.
Prime Minister Hristijan Mickoski, speaking after an emergency government session, said the tax cut would take effect at midnight on Monday and remain in place for two weeks. The decision reflects growing concern over how international supply disruptions are beginning to filter into domestic fuel prices.
According to the government’s projections, the intervention should help keep petrol prices stable in the short term. Diesel, however, is still expected to edge upward slightly, with a projected increase of around three to three-and-a-half denars per litre, a modest rise despite broader global pressures.
As of Sunday, petrol and diesel prices in the country stood at approximately €1.40 and €1.49 per litre respectively, already reflecting the strain of recent market fluctuations.
The move comes as countries worldwide scramble to contain the economic fallout from ongoing geopolitical tensions that have unsettled oil supply chains. Although global crude prices ticked higher at the end of last week, they have so far remained below the critical $120-per-barrel mark, a level analysts warn could trigger more aggressive economic countermeasures if breached.
For North Macedonia, the temporary tax relief represents a balancing act: protecting consumers from sudden price shocks while navigating an increasingly uncertain global energy landscape.
With no clear resolution to the conflict in sight, policymakers may be forced to consider additional measures if market instability persists beyond the coming weeks.
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