Montenegro collected about €6.1 million less in fuel excise revenue during the peak June-August tourism season than a year earlier, as temporary tax cuts used to cushion rising pump prices reduced one of the government’s important consumption-linked revenue streams.
Customs Administration data show excise revenue from mineral oils and derivatives totalled about €59.19 million during the three summer months, compared with approximately €65.28 million in the same period of 2025.
The decline came despite record tourism and airport activity.
That means the lower revenue should not automatically be interpreted as evidence of falling fuel consumption.
Changes in excise rates have materially altered the amount of tax collected per litre.
The largest year-on-year decline came in June.
Fuel excise receipts fell 23.6%, or around €4.94 million, to €15.97 million.
July collections reached €21.11 million, down about 2.4%, while August revenue of €22.11 million was around 2.5% lower than a year earlier.
The figures illustrate the fiscal cost of using excise policy to moderate pump prices.
Montenegro has repeatedly adjusted fuel excise duties in response to sharp movements in international oil-product prices.
The government recently cut excise duty by 40% on diesel and 30% on petrol in an effort to limit the latest price shock.
Despite that intervention, diesel still rose to €1.95 per litre, while Eurosuper 95 reached €1.74 and Eurosuper 98 €1.78.
The tax reduction therefore cushioned rather than eliminated the market increase.
For households and businesses, the measure lowers the price relative to what would otherwise have been charged.
For the budget, it reduces revenue.
That trade-off becomes more important when fuel prices remain high for an extended period.
A temporary excise reduction lasting several weeks has a manageable fiscal cost.
Repeated or prolonged reductions can materially affect annual revenue.
The summer figures already show a gap of more than €6 million over three months.
That is not large relative to Montenegro’s total budget, but it is meaningful when combined with other fiscal pressures.
The government is preparing a significant wage and payroll-tax reform for 2027.
It is also financing infrastructure, social spending and preparations for EU membership.
Every recurring tax reduction therefore needs to be offset by stronger receipts elsewhere, lower expenditure or additional borrowing.
Montenegro has so far benefited from strong overall tax collection.
Gross Tax Administration receipts approached €1.2 billion in the first eight months of 2026, around €98 million more than a year earlier.
VAT revenue was close to €380 million.
That stronger performance gives the government some capacity to absorb lower fuel-excise receipts.
But VAT and excise taxes respond differently.
VAT benefits directly when nominal prices and consumption rise.
A discretionary excise reduction removes revenue intentionally.
The government therefore needs to distinguish between revenue lost because economic activity weakened and revenue forgone because tax policy changed.
The current data appear to reflect the latter to a significant degree.
Tourism reinforces that interpretation.
Montenegro experienced strong visitor activity through the summer, while airport traffic reached record levels.
Road traffic also rises sharply during the tourism season.
Under normal tax rates, those conditions would typically support strong fuel-excise receipts.
The fact that revenue still fell suggests the rate changes had a material fiscal effect.
For businesses, the cuts provide short-term relief.
Transport companies, construction contractors, hotels, distributors and logistics operators are directly exposed to diesel prices.
Fuel costs can quickly affect operating margins.
A company with a large vehicle fleet cannot easily reduce consumption when prices rise.
Tourism is also sensitive.
Visitors arriving by car from Serbia, Bosnia and Herzegovina and other regional markets make road-fuel prices part of the overall travel cost.
Higher diesel also feeds into the price of food and other goods transported across Montenegro.
That creates an inflation channel.
The government therefore has a reason to intervene when fuel prices increase rapidly.
The problem is deciding how much revenue to sacrifice.
Broad excise reductions benefit every litre sold, including consumption by higher-income households and businesses capable of absorbing the price increase.
That makes them less targeted than direct support to particularly vulnerable groups or sectors.
They are, however, simple to administer and immediately visible at the pump.
That political and administrative simplicity explains why governments often use fuel taxes as a shock absorber.
Montenegro has done so repeatedly.
But frequent adjustments make public-finance forecasting more difficult.
Budget planners cannot assume a stable annual excise yield if rates change whenever international oil prices move sharply.
That uncertainty is particularly relevant because Montenegro imports nearly all of its petroleum products.
Global oil prices, refining margins and regional supply conditions therefore feed directly into domestic pump prices.
The country has little control over the underlying commodity cost.
Its main policy levers are taxes and strategic reserves.
Montenegro is building mandatory oil-product reserves intended eventually to cover 90 days of supply, with about 40% of the target accumulated so far.
Those reserves are aimed primarily at supply security rather than retail-price management.
Excise policy therefore remains the fastest instrument for cushioning price spikes.
The summer figures show the cost.
At about €59.2 million, fuel-excise revenue remained a significant source of public income.
But the year-on-year decline of more than €6 million came precisely during the part of the year when traffic and tourism normally provide the strongest support.
The fiscal question now depends on how long the latest tax cuts remain in place.
If energy prices stabilise and full excise rates return, the annual revenue effect may remain manageable.
If high prices force repeated reductions, the cumulative cost will become larger.
Montenegro has so far been able to absorb that through stronger overall tax collection.
The risk is that temporary fuel relief becomes a recurring structural expense at the same time the government is preparing larger wage, investment and EU-accession commitments.
