As rising fuel prices in international markets are being reflected in citizens' pockets, governments in the region are choosing different ways to respond to the situation. Montenegro has decided to intervene again by reducing excise taxes, while Albania has so far not taken a similar fiscal measure to amortize the increase in costs.
The Montenegrin government announced a further reduction in excise duties on gasoline and diesel, with the stated aim of mitigating the effects that rising global fuel prices are having on the domestic market.
From August 25, the excise tax on unleaded gasoline will be reduced to 0.522 euros per liter, from the usual rate of 0.549 euros. Meanwhile, the intervention is stronger for diesel, where the excise tax will be reduced to 0.352 euros per liter, from 0.396 euros that was set in mid-August and 0.440 euros, which is the usual rate.
The Montenegrin Ministry of Energy announced that, after reducing the excise duty by 5% on unleaded petrol and 20% on diesel, the latter will cost 1.87 euros per liter from August 25, a decrease of 1 cent per liter. Eurosuper 98 petrol also decreases by 1 cent, reaching 1.79 euros per liter, while Eurosuper 95 remains at 1.76 euros per liter.
The Montenegrin government began temporarily reducing excise duties at the end of March, following a sharp increase in global oil costs. Since then, the excise duty level has been revised several times depending on developments in international markets.
Montenegro has also changed its price-setting mechanism, temporarily shortening the review period from 14 to seven days, so that prices on the domestic market can adjust more quickly to international fluctuations.
On the other side of the border, the situation highlights a different approach by the Albanian government. Despite the weight that fuel has in the expenses of citizens and businesses, a similar intervention through a reduction in excise duty or other taxes on fuel has not been announced in Albania so far.
The comparison is made even more significant by the fact that Montenegro did not wait for prices to reach extreme levels to act. By temporarily reducing the fiscal burden, the Montenegrin government has chosen to forgo part of its budget revenues in order to limit the bill passed on to consumers.
In Albania, meanwhile, the fiscal burden on fuel remains unchanged. Thus, while a neighboring country uses taxes as an instrument to cushion international market shocks, Albanian consumers continue to bear the price increases out of their own pockets without any help from the government.
