The mitigation of the economic impacts from the fuel price shocks: Serbian case

The exposure to the risks of the crude oil price volatility for an net-importer country such as Serbia are neglected in its energy policy which has to be first and most important level of structural response to this inherent feature. The shocks in the past, and the current challenges, are not intended to be solved in long-term and sustainable way. The energy transition in Serbia have to be based on locally available and climate friendly energy sources, energy efficiency measures, new technologies, but not only in the area of fiscal policy and taxation of fuels. Having in mind the importance of fuels on the expense/revenue sides of the national budget, this paper will analyze two energy policy scenarios in two fuel price outlooks regarding impacts to the national budget, and further economic development. The economic impacts of the fuel prices volatility will be quantified: by sector of the transport for agriculture, commercial and household sectors, to determine their vulnerability to the shocks. The elasticity of the sectors to respond to these impacts will be qualified. Then, the possible pathways of an economically, and socio-environmental effective distribution of the impacts within these sectors will be suggested to the decision makers. Finally, the potential of long term mitigation of these impacts by the terms of an energy climate policy and energy transition scenarios will be discussed.