Slovenia During the Oil Crisis (1979−1985): from Odd-Even System to the Introduction of Petrol Coupons
SLOVENIA, September 30 - The document presented here as this month's archivalia was created during the second major international oil crisis. The crisis began in early 1979, following the victory of the Iranian Islamic Revolution, the overthrow of the Shah of the Iran, Mohammad Reza Pahlavi, and the seizure of power by Ayatollah Khomenini. The situation was further exacerbated in 1980 by the outbreak of a long war between Iraq and Iran, which lasted until 1988. All this political and military turmoil in the Middle East led to a decline in oil production and disrupted oil supplies, which in turn placed considerable pressure on the global oil market at a time when developments in industry were already driving up demand for crude oil and petroleum products.
In our former common state, the Socialist Federative Republic of Yugoslavia (SFRY), crude oil and petroleum products were administered in Belgrade at the federal level. The first measure aimed at reducing consumption of petroleum products was introduced as early as 1979 under the Act on Limited Use of Private Cars and Other Motor Vehicles. The Act introduced the highly unpopular method of using private cars and motorbikes according to the »odd-even« system, under which cars with licence plates ending in an even number were allowed on certain days, and those ending in odd number were allowed to drive on alternate days.
At its 91st session, held on February 25 and 27, 1980, the Coordination Commission of the Executive Council of the Assembly of the Socialist Republic of Slovenia (SRS) discussed the Information on the Increase in Prices of Petroleum Products, a document prepared by the Republic Committee for the Market and Prices in collaboration with the Republic Committee for Finance. According to the document, the prices of crude oil increased by an average of 57.1% between October 1979 and January 1980. “In accordance with the increase in prices of crude oil and the criteria for price determination, adopted by the Federal Executive Council of SFRY, the refinery prices of petroleum products increased by an average of 42.69%, while retail prices by 26.7%.” The cost of international transport increased as well, by 18%.
The document shows that the Slovenian Executive Council and the Republic Committee for the Market and Prices objected not only to the way in which the prices of petroleum products were increased, but also to other measures adopted by the Federal Executive Council of the SFRY on February 14, 1980. They found it particularly hard to understand why the basic turnover tax rate on diesel fuel had been lowered “since the difference between the retail price of petrol and diesel fuel remained inexplicably high, which meant the already agreed-upon transport policy could once again not be implemented.” They also particularly emphasised the decision “to equalise the price of domestic oil with that of the imported oil” and the rejection of the proposed “minimal adjustment of margins, which makes it impossible for distribution organisations to operate without losses”.
Other documents in the same set of meeting papers of the Coordination Commission show that, from 1978 onwards, the Executive Council of the Assembly of the SRS repeatedly drew attention of the Federal Executive Council to the need for a comprehensive approach to solving key issues concerning the use of petroleum products and their pricing policy. Particular emphasis was placed on the need to align pricing policy with the development policy of the oil industry. Also of critical importance was the need for measures to ensure that the economy would be burdened as little as possible by such increases in costs resulting from higher prices of petroleum products. “The policy of retail prices will have to follow the need for gradual increase in funds for republic and regional oil reserves, higher margins for storage capacities, and the raising of the so-called “road-dinar”, a levy on fuel sales earmarked for construction and maintenance of main roads.”
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