Constitutional Court to examine fuel marking concession

TIRANA, Sept. 11 – Albania’s Constitutional Court has postponed the examination of an appeal by the Association of Fuel Importers which opposes a fuel marking concession contract the government has awarded to a Canadian concessionaire as creating a monopoly and further increasing costs. The Constitutional Court has decided to examine the case on October 3, when the new government which has strongly opposed the concession will have taken over. Renowned lawyer Thimio Kondi who is defending the Association of Fuel importers in the case against the Finance Ministry tells reporters the government has violated constitution and economic freedoms which can be curbed only under a law and not a government decision as was the case with the fuel marking concession.
Starting August 2013, for the first time in Albania, fuel will be marked at minor cost in an effort to strengthen monitoring of the market which has often abused consumers. The process will be carried out by Global Fluids International (GFI), a subsidiary of Canadian-based Eurocontrol which has won a 10-year contract to monitor the quality of fuel in Albania.
While the Association of Fuel Importers had initially described the concession as an unfair monopoly which risks a further increase in fuel prices, already at their historical record high levels, other experts say the fuel marking process which will cost an extra 0.74 lek/litre will give a new boost to the market by further modernizing it.
“Now at only 0.74 lek/litre VAT included, the fuel market will breathe freely paving the way to its full modernization. Thus, big international companies which are currently on hold will enter,” says Dritan Spahiu, an energy expert. Elaborating on the misunderstanding between fuel marking and colouring, he said “marking consists in a secret formula which cannot be copied or falsified.” “Fuel marking involves an additional coulourless solution which is added to fuel and detected only by the company which produces it,” says Spahiu adding that the procedure will bring extra income to the state budget.
The project will cover the marking of all distilled fuels as well as the growing volume of Albanian exported crude oil. Eurocontrol estimates the annual increase in fuel tax collections will exceed 150 million Euros per year.
The Association of Fuel Importers describes the concession as an unfair monopoly which risks a further increase in fuel prices, already at their historical record high levels. In a letter sent to the Competition Authority just before the Finance Ministry signed the contract with the winning consortium which was the only bidder in an international tender held last May, the Association demands the intervention of the Competition Authority to stop the monopoly in the fuel market.
“The tariff set for this service at 200 lek/1,000 litres initially introduced by the bidder has been finalized to 614 lek/1,000 litres of fuel, which means 6.5 Euros/1,000 litres. This tariff is even higher than the profit the companies themselves make,” says the Association. Introducing a list of institution monitoring the fuel market, such as the Directorates of Metrology, Patents and Trademarks, the Central Technical Inspectorate, the Association casts doubts on the necessity of the monopoly service at a time when the imported fuel is already marked by the foreign refineries under EU standards. Bardhi Sejdarasi, the Association’s coordinator says the fee in EU countries is around 0.1 USD per tonne of fuel.
In an international tender held on May 14, 2012 Austria-based Global Fluids International won a 10-year contract to monitor the quality of fuel in Albania. Global Fluids, which bid USD 4 million, had earlier been awarded a bonus by government because of making an unsolicited offer. The company will check fuel quality in customs points. The fuel quality is currently supervised by the Central Technical Inspectorate. The Socialist Party has also denounced the tender on fuel marking as abusive and lacking transparency.