Fuel in Albania Costs Around 30% More Than the Regional Average, with No New Protective Measures

The rise in retail fuel prices has once again prompted governments across the region to intervene by reducing fuel excise duties. Albania, despite having the highest prices in the region, has so far announced no new measures in this regard.

Diesel has been selling in the Albanian market at 219 lek per liter for around a week. In the European currency, this translates to approximately 2.3 euros per liter, while in July the price was 2.06 euros.

Gasoline currently costs around 2.1 euros per liter.

Within this period, the price of diesel in Albania has risen by around 0.24 euros, or 21 lek per liter, compared with July.

A comparison of data collected by Monitor correspondents in the Western Balkan countries shows that fuel in Albania continues to be sold at significantly higher prices.

This has revived discussions about the possibility of reducing taxes on fuel.

Albanian diesel is 41% more expensive than in North Macedonia, where the lowest price in the region is recorded. It also costs 17% more than in Serbia, which ranks second for the highest price after Albania.

According to Monitor’s calculations, the price in Albania is 30% above the regional average of 1.77 lek per liter.

The high price level in Albania is mainly linked to the heavier fiscal burden imposed on diesel.

In the countries of the region, the price is generally calculated on the basis of the initial price, the excise duty and VAT applied to their combined amount. In Albania, in addition to the excise duty of 0.37 euros per liter and 20% VAT, consumers also pay two other taxes.

These are the circulation tax, amounting to 27 lek per liter, and the carbon tax, at 3 lek per liter. As a result, the fiscal component accounts for around 50% of the price, or approximately 100 lek per liter.

Despite the rise in prices, the Albanian government has so far announced no new fiscal measure aimed at reducing them.

In March, a decision was approved to reduce fuel excise duties by 20% if the retail price of diesel exceeded 220 lek per liter. For gasoline, this measure is activated when the price exceeds 200 lek per liter.

The implementation of this mechanism has been limited. Finance Minister Petrit Malaj previously stated during a parliamentary session that the measure had been used twice, while its financial impact was calculated at 37 million lek, or around 400,000 euros.

Montenegro has introduced another excise-duty reduction.

In Montenegro, the price of the benchmark “Eurosuper 98” gasoline has reached 1.79 euros per liter, while Eurodiesel costs 1.87 euros per liter and gasoline 1.76 euros per liter.

Compared with July, diesel has become 0.11 to 0.21 euros more expensive per liter.

Following this increase, the Montenegrin government once again responded with fiscal measures. On August 25, it decided to reduce the excise duty on diesel by 20% and on unleaded gasoline by 5%. The new excise duties will apply until September 5.

Even after the war began in the Middle East, Montenegro was among the first countries to intervene to soften the impact of rising prices on consumers’ purchasing power. On March 22, the government approved a 50% reduction in the excise duty on diesel and a 25% reduction for gasoline.

North Macedonia continues to apply the excise-duty reduction.

In North Macedonia, diesel sold for 1.63 euros per liter during August, while gasoline cost 1.54 euros. Compared with the July average, the price of diesel rose by 0.21 euros per liter.

Although no new fiscal measures have been reported, the March 22 decision remains in force, reducing the excise duty on diesel by 0.06 euros and on gasoline by 0.03 euros per liter.

On the same date, an 8% reduction in VAT on fuel was also approved. The rate was reduced from 18% to 10%. On April 5, the government decided that this reduction would remain in force until the crisis ended.

So far, no decision has been made to restore the 8% VAT reduction.

Serbia has extended its measure to reduce excise duties.

The price of diesel in Serbia has reached 1.96 euros per liter, while in July it ranged from 1.82 to 1.87 euros. Compared with the previous month, the increase has been between 0.09 and 0.14 euros per liter.

Following the price increase, the Serbian government extended until the end of August its decision to reduce the excise duty on petroleum products by 20%. Meanwhile, the Ministry of Trade continues to set the maximum weekly retail prices for diesel and gasoline.

Bosnia and Herzegovina has begun implementing margin restrictions.

At retail outlets in Sarajevo, diesel costs between 1.69 and 1.82 euros per liter. According to the correspondent’s data, the price has risen by 0.29 euros per liter compared with July.

After the legislative deadlock was resolved, the Bosnian government intervened during this second wave of price increases by implementing the decision to limit profit margins.

Under this decision, the maximum margin for unadditized petroleum products has been set at around 0.03 euros per liter in wholesale trade. For retail sales, the limit has been set at 0.13 euros per liter.

The decision to limit the retail margin to 0.13 euros per liter had been approved in March, but could not be implemented. The obstacle was the failure of one of Parliament’s chambers to approve amendments to the Law “On Excise Duties.”

Kosovo continues to keep profit margins capped.

In Kosovo, the price of diesel has risen to 1.76 euros per liter, from 1.56 euros in July. The increase is calculated at 0.2 euros per liter, while gasoline has risen to 1.53 euros per liter.

Despite the price increases, Kosovo has also taken no decision to reduce taxes. The directive approved in March remains in force, allowing a profit margin of up to 12 euro cents per liter in retail sales and 2 euro cents per liter in wholesale diesel trade.