Monitor: Fico: Fuel Curbs to Last One Month, EU Unlikely to React

(STVR, 'Sobotne dialogy', 21 March) A government regulation limiting diesel purchases and introducing dual pricing disadvantaging foreigners will apply for only one month, and the European Union will not have time to react to such short-lasting changes, Prime Minister Robert Fico (Smer-SD) declared on STVR's politics programme 'Sobotne dialogy' (Saturday Dialogues). Fico added that he is therefore not concerned about a possible response from the European Commission (EC). Different fuel prices for foreigners are currently also applied by Hungary. "Thirty days is too short a period to launch any infringements. For 30 days we will protect the market, because we have lower diesel prices than in neighbouring countries and we must protect our own market. I consider this step fully justified," the prime minister said. If the EC wanted to punish Slovakia for adopting such legislation, the government would defend itself, according to Fico. "I do not think that these 30 days are so decisive that the Commission would be able to adopt any repressive measures against us in that time," he added. The prime minister believes the oil crisis will continue and that even if the war in Iran ended immediately, it would take several months for the situation to stabilise. "We have two scenarios. One is worse and the other is catastrophic," he said. In the first case, there would be pressure from constant increases in fuel prices due to limited oil supply. The catastrophic scenario, according to Fico, would involve a lack of oil, leading to an oil shock. "Not only would prices surge dramatically, but there would not be enough of the commodity for processing, meaning there would not be enough fuel," he warned. A sharp rise in fuel prices would quickly feed through transport costs into inflation, affecting the entire economy. In a prolonged conflict, costs would also rise for farmers, not only due to diesel prices but also because of higher fertiliser costs, which are produced from increasingly expensive natural gas. The prime minister stressed that affected sectors would likely seek state compensation, which in turn would increase the state budget deficit. The EC therefore wants such expenditures not to be counted towards the deficit in such cases. mf