New tax on fuel sends prices up

New tax on fuel sends prices up
Up to 187 lek per liter. This is the highest price of fuel registered during the weekend in Albania. This price belonged to 100 octane petrol, while 85 octane petrol was sold at around 173 lek a liter. Diesel was sold around 170-172 lek a liter and liquid gas was sold at 60-83 lek a liter. This is a new reality of the recent days, where prices have registered an average increase of 5 lek per liter nationwide. This ranks Albania among the countries with the highest fuel prices. According to the latest listing offered Global Petrol Prices agency, Albania ranks 141st among the 160 countries of the world with a liter of fuel costing 1.53 USD. Meanwhile, Germany is listed three places behind it with 1.54 USD per liter, while Germany’s GDP per capita is much higher than Albania’s. Meanwhile, the price of fuel in neighboring Macedonia is 1.19 USD per liter, ranking 106th in the world. In many cases, Albanians fill up their tanks in the neighboring country, as a good way to save money on their fuel expenses.

Meanwhile, what’s interesting in all of this is the fact that the increase is the same all over the country, that is, 5 lek per liter, although the new relicensing tax, which has been introduced a few weeks ago and which has been used by petrol stations as the main argument to increase prices, is not the same for all the districts of the country.

This tax amounts to 30 million lek for petrol stations in Tirana and 10 million lek in other municipalities. According to representatives of the Association of Hydrocarbons, this is explained by the fact that petrol stations outside Tirana manage to sell less than those in the capital and as a result, they increase the price in order to pay the fixed relicensing tax, which doesn’t depend on the amount of fuel that they sell.

Albanian Free Press interview with the chairman of the Association of Hydrocarbons, Luigj Aliaj

“The increase in fuel prices will not stop, consumer will pay for it”

Mr. Aliaj, in the recent days, we’ve seen a fresh increase in the price of fuels all over the country. According to you, why has this happened?

Yes, it is true that there has been an increase in the price of fuels and there are three reasons for this. The first reason relates to the introduction of relicensing tax, the second reason relates to the increase of the price of crude oil in international markets, while the third reason relates to the increase of the value of the US Dollar in foreign markets. We must say that the relicensing tax is a heavy tax. It amounts to 3 million lek for each petrol station in Tirana and 1 million lek for petrol stations outside the capital. Although the Constitutional Court considered it unlawful, the tax was nonetheless introduced. In the end, it’s the people who pay.

How is it possible that this sudden increase is the same for all petrol stations? In fact, there are experts who talk about secret deals among companies.

No, it’s not this, because their costs are the same and crude oil around the world is a product which is quoted in the market. For instance, all over the world, on Friday and Saturday, oil has been bought at 55 USD per barrel. Everything else is fixed. Taxes are the same about everyone, excise is the same and once they run out of reserves, the price is the same for everyone, although, we must say that there are also different prices. This is why this is not a case of a secret deal between companies, as this is impossible. The number of companies in the country is 3 or 4, but there are over one thousand petrol stations. It is impossible to make a deal with so many of them. We need to wait on new developments in foreign markets to see what will happen with the future of fuel prices in Albania. But, we cannot hope to see domestic companies cut fuel prices, because they cannot afford it.

 Consumer Association

“Consumers have issued complaints for the price and quality of fuel”

Besides talking about it every day, Albanian consumers have also expressed their concerns on the frequent changes of the price of fuel by lodging official complaints to the Consumer Association. Such thing is confirmed by the representative of this institution, Fatmira Biçaku, according to whom, many consumers have submitted their complaints throughout the years. “Consumers have complained to this institution not only about the increase of the price of fuel, but also about the quality of fuel, which is very poor”, Biçaku says.

Buxhuku: High prices indicate the presence of cartels

It’s a known fact now that the fuel market in Albania uses double standards when it comes to price changes. This is the opinion of the head of Konfindustria, Gjergj Buxhuku for Albanian Free Press, concerning the fresh increase of prices in world markets in the country. According to him, the price increase in world markets is reflected immediately in Albania, while decreases take time to be reflected. “The most outrageous thing is that for years now, Albania has ranked as one of the countries with the highest fuel prices in Europe. The fact that the biggest market in the country with a value of 1 billion euro a year or 12% of GDP, functions like this, has catastrophic consequences on the economy and wellbeing of Albanian consumers”, he says. Buxhuku also adds that “the constant increase in fuel prices is the best example of the presence of cartels and oligopolies”.

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