Since the weekend, fuel prices in the retail market have increased by 10 to 14 lek more than previous prices.
Diesel at gas stations is being sold at a price of 229 lek per liter, or 10 lek more expensive than before, while gasoline is 219 lek per liter, or 14 lek per liter more expensive.
But, as the price of oil has reached new records, unlike other countries in the region, which have been adopting new fiscal measures to reduce excise duty for several weeks, Albania is not taking any new measures to cushion the effects of the price increase. In fact, the Normative Act that provided for the limited reduction in excise duty is no longer in force.
Due to rising prices, on April 3, the government approved the Normative Act to reduce excise duty by 20% if the retail price of diesel exceeded 220 lek per liter and gasoline exceeded 200 lek per liter.
But the Ministry of Finance explained to Monitor that the decision-making on the application of the excise tax reduction was related to the functioning and decision of the Board. After stabilizing prices for several weeks, the Transparency Board is not functioning.
But even when the normative act was in force, the fiscal measure had limited use. Finance Minister Petrit Malaj earlier stated during a plenary session that the measure had only been used twice and the financial effect was estimated at 37 million lek or about 350 thousand euros.
Meanwhile, Albania continues to have the highest fuel prices in the region due to the high fiscal burden that accounts for almost 50% of the price and the lack of fiscal measures. According to another Monitor analysis, oil in Albania a few days ago was 30% more expensive than the regional average, due to the high fiscal burden and the lack of fiscal measures, while many countries in the region restored them.
Also, in all countries in the region, only excise duty and VAT are calculated on the base price of oil. In some countries in the region, the excise duty is 2% less. In North Macedonia, VAT is 18% for oil and gasoline, but was reduced to 10% during the period of price increases.
In Kosovo, an 18% VAT rate is also applied.
VAT in Montenegro reaches 21%, but this country charges oil with only 2 taxes: VAT and excise duty, which was recently halved as a measure to amortize prices.
In Serbia, VAT is 20%, while the excise tax before the war was 59.5 lek per liter. But immediately after the conflict in the Middle East began, Serbia reduced the excise tax by 25%. The measure was reactivated a few weeks ago.
In Albania, in addition to the high excise tax of 39.4 lek per liter, the 20% VAT and the lack of fiscal measures, two additional taxes are applied to the price of oil, which are not applied in the countries of the region. The circulation tax worth 27 lek per liter and the carbon tax of 3 lek per liter.
Oil hits new records, Albania without protective measures
Oil in Albania has reached 229 lek per liter, while gasoline has risen to 219 lek, marking new record levels and increasing pressure on consumers and businesses.
According to data published by Monitor, the increase in fuel prices is occurring while Albania has not taken new measures to mitigate the impact on citizens. Meanwhile, the mechanism envisaged to reduce excise duty by 20% remains limited in its implementation.
According to the scheme, the 20% excise tax reduction was activated when oil exceeded 220 lek per liter and gasoline exceeded 200 lek per liter, but the decision-making for its application was related to the functioning and decision of the Board.
Data shows that this measure has only been used twice. According to Monitor, the effect on the budget from its application has been around 37 million lekë, while the mechanism has not become a sustainable instrument for protecting consumers from price increases.
The level of 229 lek per liter for diesel and 219 lek for gasoline also adds to concerns about the costs of transportation, production and services, with a knock-on effect on the prices of goods and services.
In the context of the new price increase, the question remains open whether the excise duty reduction mechanism will be activated again or whether the government will take other measures to mitigate the cost of fuel for Albanian consumers. /Monitor.al/
