Retail fuel prices have risen again since the weekend, by 10 to 14 lekë per litre compared with previous levels.
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Diesel is now selling for 229 lekë per litre, an increase of 10 lekë, while the price of petrol has reached 219 lekë per litre, up by 14 lekë.
These levels represent new records, while Albania has taken no additional measures to cushion the impact of the increase on consumers and businesses. Unlike some countries in the region, where measures to reduce excise duty have been approved, no new initiative has been undertaken in Albania, and the Normative Act providing for a limited reduction in the tax is no longer in force.
On April 3, the government approved the Normative Act, which provided for a 20% reduction in excise duty if the retail price of diesel exceeded 220 lekë per litre and that of petrol exceeded 200 lekë per litre.
The Ministry of Finance told Monitor that implementation of the reduction depended on the functioning and decision-making of the Board. After prices stabilised for several weeks, the Transparency Board is no longer operating.
Even during the period when the Normative Act was in force, use of the fiscal measure was limited. Finance Minister Petrit Malaj previously stated in a parliamentary session that the reduction had been applied only twice, with a financial impact of 37 million lekë, or around 350,000 euros.
Albania continues to have the highest fuel prices in the region, mainly because of the tax burden, which accounts for around 50% of the price, as well as the lack of new interventions. According to an analysis by Monitor, just a few days ago diesel in Albania was 30% more expensive than the regional average.
In the countries of the region, only excise duty and VAT are applied to the base fuel price. In some of them, excise duty is 2% lower. In North Macedonia, VAT on diesel and petrol is 18%, but during the period of rising prices it was reduced to 10%.
Kosovo applies an 18% VAT rate.
VAT in Montenegro is 21%, but diesel is subject to only two taxes: VAT and excise duty. The latter was recently halved as a measure to cushion the rise in prices.
In Serbia, VAT is 20%, while before the war began, excise duty stood at 59.5 lekë per litre. After the conflict began in the Middle East, Serbia cut excise duty by 25%, and the measure was reactivated several weeks ago.
In addition to excise duty of 39.4 lekë per litre and 20% VAT, the price of diesel in Albania includes two other taxes that are not applied in countries across the region: a circulation tax of 27 lekë per litre and a carbon tax of 3 lekë per litre.
The increase in diesel prices to 229 lekë per litre and petrol prices to 219 lekë per litre is adding pressure to transport, production and service costs, creating knock-on effects on the prices of goods and services.
It remains unclear whether the mechanism for reducing excise duty will be brought back into use or whether the government will approve other measures to ease the fuel burden on Albanian consumers.
