TIRANA, Nov. 7 – One month before the new road circulation tax applying a fixed 5 lek fee entered into force yet, Albania saw an unprecedented boom in fuel imports. Figures in the latest fiscal report by the Finance Ministry show Albanian fuel companies hurried to increase their diesel and petrol imports in order to escape the new tax which entered into force in Sept. 2011.
Data show diesel import in August 2011 rose by 44 percent to 72 million tonnes, up from 50 million tonnes in August 2010, while petrol imports rose by 10 percent to 17,465 tonnes. The increased quantities of imported fuel also significantly increased tax collection rates to 5.7 billion lek in August 2011, compared to 3.9 billion lek in Aug. 2010. Diesel and fuel imports were worth 7.3 billion lek, a figure which shows tax collection on fuel stands at 78 percent of their price.
Average oil prices in Albania currently stand at 171 lek/litre for diesel and up to 186 lek/litre for petrol, registering an increase of up to 10 lek/litre compared to last summer. Experts explain the situation with soaring prices in international markets where prices are reported to have reached 100 dollars per barrel, and the depreciation of the national currency, lek, against the US dollar and the Euro. The high tax burden, with excise tax currently at 37 lek/litre, VAT at 20 percent, the newly increased carbon tax, port taxes and transport expenditure all add to the final price.
Oil imports are further expected to increase as the new circulation tax will increase by another 2 lek starting from Jan. 2012.
The changes in fuel taxation came into force last September as part of a new fiscal package lifting customs duties are being applied for imported cars whose owners will only have to pay the 20 percent value added tax. The removal of customs duties for cars in late August has considerably increased their import to Albania and reduced their prices. Sources from the General Directorate of Customs say that on average some 100 cars a day have been cleared through customs since August 24, when the new law lifting customs duties for imported cars entered into force in an effort to unblock the sales of second-hand cars whose transactions dropped by 25 percent during the first eight months of this year. Since mid-2010, when a new law which increased taxes on the sale of used cars took effect, the sale of cars under legal contracts has declined– as car owners began resorting to authorization or donation practices to sell their cars. Local traders say second-hand car prices have dropped by almost 30 percent after the import tax was lifted.
