Energy Minister Dubravka Đedović Handanović declared the energy sector “almost impossible” to manage under the U.S. sanctions, offering her resignation.
Serbian President Aleksandar Vučić warned on Sunday that a resolution for the Oil Industry of Serbia (NIS) – the country’s primary refiner, which the United States has sanctioned over its majority Russian ownership – must be reached within the next seven days to avert a potential collapse in fuel supplies.
Speaking at an open session of the Serbian government, Vučić outlined the stakes: The U.S. Treasury’s Office of Foreign Assets Control (OFAC) has demanded that Russian entities divest their controlling stake in NIS as a precondition for lifting the sanctions, which took full effect on 8 October after multiple delays.
Russia’s Gazprom Neft holds 44.9% of shares, with Gazprom owning another 11.3%; the Serbian government controls 29.9%, and the remainder is held by minority investors. Last week Gazprom formally notified OFAC of their willingness to relinquish control of Serbia’s majority-Russian-owned oil giant NIS to a third party. Vučić emphasized that nationalization remains a last resort, stating, “If the Russians fail to agree with their partners on the price, Serbia will offer a better price for the Russian part of NIS.” He added that Belgrade would accept any viable deal involving Asian or European buyers, underscoring his aversion to property seizures: “I do not want anyone’s property to be confiscated or seized.”
The sanctions have already disrupted operations: Banks have frozen NIS transactions, and Croatia’s JANAF pipeline – Serbia’s main conduit for crude oil imports – halted deliveries immediately upon enforcement, leaving the Pančevo refinery with enough feedstock to operate only until 25 November.
Without fresh supplies by 13 February, Vučić cautioned, “Serbia will be in complete collapse.” He plans to engage directly with Russian counterparts again and hopes for a joint letter to OFAC from Moscow and potential buyers, which Serbia would co-sign as a 29.87% stakeholder.
To fund a potential buyout, Vučić directed National Bank of Serbia Governor Jorgovanka Tabaković to prepare a “special operation” if needed – details undisclosed, but framed as a means to avoid nationalization while securing funds from European partners or other sources.
“We will find the money. We will talk to the Europeans and everyone else,” he said.
The government is also poised to rebalance this year’s budget, with an estimated €60-65 million required for additional gasoline and €40 million for diesel procurement. Parliament Speaker Ana Brnabić assured Vučić that lawmakers would urgently approve any necessary amendments.
Vučić detailed Serbia’s stockpiles to underscore preparedness: NIS holds operational reserves of 7,200 tons of gasoline, 33,000 tons of diesel, and 3,800 tons of kerosene, supplemented by the Serbian Army’s 15,000 tons. Broader state reserves include 50,340 tons of gasoline, 92,654 tons of diesel, 8,128 tons of liquefied petroleum gas, 20,000 tons of kerosene, and 84,000 tons of crude oil. Mandatory commodity reserves add another 19,145 tons of gasoline, 188,000 tons of diesel, over 68,000 tons of fuel oil, plus 60,000 tons held by the Serbian Electric Power Industry (EPS).
He also issued directives on energy infrastructure: Municipalities in Vrbas, Jagodina, and Belgrade must settle heating plant bills promptly, while Srbijagas Director Dušan Bajatović was ordered to finalize gas supplies for Valjevo and advance pipelines along the Aleksandrovac-Tutin and Leskovac-Vranje routes. Vučić stressed the need for an interconnector with North Macedonia to bolster future gas security.
Energy minister offers resignation amid sector strain
In a stark admission during the same session, Energy Minister Dubravka Đedović Handanović declared the energy sector “almost impossible” to manage under the sanctions, offering her resignation. “Without the refinery in Pančevo, we have no life. It is vital for our citizens, economy, healthcare, schools – without fuel, even bakeries cannot get bread every day,” she said, highlighting that Serbia has received “not a single drop of oil” via JANAF for 37 days.
The minister noted multiple license extensions since the sanctions’ initial imposition on 9 October but stressed the latest U.S. directive: A permanent ownership change must occur within three months, pending Washington’s approval.
She credited state preparations – including a 60% reserve buildup over three years – for shielding citizens so far but warned of dwindling time: “We can wait another three or four days, but no more… The refinery will cease operations.” Đedović Handanović urged daily government meetings and “difficult decisions” to prioritize national interests, while expressing hope that partners would grasp Serbia’s predicament.
Contrasting claims: rising fuel prices undermine assurances of no impact
Vučić and Đedović Handanović repeatedly asserted that the sanctions’ effects remain imperceptible after 37 days, thanks to robust stockpiles and proactive planning: “No one in Serbia has felt anything,” Vučić insisted, adding that panic is unwarranted but reserves cannot be fully depleted without risking supply imbalances.
However, this narrative clashes with mounting evidence from industry experts and market observers, who point to inevitable price hikes as imported fuels – now sourced via costlier barge, rail, and truck routes from Greece, Romania, and other European refineries – fill the gap left by NIS, which supplies over 80% of Serbia’s gasoline and diesel.
Since the sanctions’ enforcement, gasoline prices have surged by approximately 15-20% at the pump, with regular unleaded now averaging 195-205 dinars per liter (up from 165-175 dinars pre-October), while diesel has climbed 18-22% to 195-210 dinars per liter (1 EUR ≈ 117.10 Serbian dinars).
Also, payment with major international bank cards (Visa, Mastercard, and American Express) is no longer possible at Gazprom-branded filling stations in Serbia.
Retailers like OMV and Eko, which have shifted away from NIS supplies citing sanction risks, report doubled import volumes but warn of logistical bottlenecks in Serbia’s landlocked infrastructure, exacerbating costs.
Economist Ljubodrag Savić of the University of Belgrade described the dynamic as “logical”: With NIS sidelined, remaining suppliers face unchecked demand, driving prices higher and fuelling inflation in transport, food, and goods.
The Association of Oil Companies of Serbia echoed this, noting imports alone cannot sustain daily needs of 44,000-49,000 barrels of diesel and 14,000 barrels of gasoline without further escalation.
Finance Minister Siniša Mali has cautioned that prolonged disruptions could erode economic growth, credit ratings, and foreign investment, amplifying the human cost beyond the pump.
