TIRANA, May 21 – Albania’s household electricity prices are higher than in six European countries, although the country’s GDP per capita, an indicator of the standard of living, is among the lowest in Europe, data by Eurostat, the statistical office of the European Union showed this week.
At Euro 11.5 per 100 kWh, Albania’s household electricity prices including VAT at 20 percent, are higher than in Serbia at Euro 6.1, Macedonia at Euro 7.8, Bosnia and Herzegovina at Euro 8, Bulgaria at 8.8 Euros, Montenegro at 10.5 Euros and Iceland at 10.9 Euros.
Eurostat data show Albania’s GDP per capita at the end of 2012 was at 3,344 Euros, higher only compared to Bosnia and Herzegovina’s 3,419 Euros but seven times lower compared to 25,700 for the EU 27 average.
Expressed in euro, average household electricity prices in the second half of 2013 were lowest in Bulgaria (Euro 8.8 per 100 kWh), Romania (Euro 12.8) and Hungary (Euro 13.3) and highest in Denmark (Euro 29.4), Germany (Euro 29.2), Cyprus (Euro 24.8) and Ireland (Euro 24.1). The average electricity price in the EU28 was Euro 20.1 per 100 kWh.
Albania’s GDP per capita expressed in purchasing power standards, an artificial currency unit that eliminates price level differences between countries, remained unchanged at 30 percent of the EU-28 in 2012, ranking on the bottom of 39 country-list, according to Eurostat.
Price increase expected next year
Albanian households will face an increase in electricity prices next year. The energy regulator ERE has warned the two-tier billing system will be lifted by the end of this year and unified prices be set for all household consumers. The reform will affect around 80 percent of household consumers who consume up to 300 kWh/month and are charged at lower tariffs.
Energy Minister Damian Gjiknuri has also stressed the necessity of the reform, but pledged compensation for the families in need.
The energy regulator also plans to continue the application of fixed-rate billing because of the high number of informal buildings and lack of meter readers.
Albania’s energy regulator, ERE, has ruled power prices will remain unchanged even for 2014, but said it might review them for 2015 considering the huge losses in the distribution system where around half of the electricity fed into the grid goes unpaid because of thefts and the dilapidated network.
ERE officials say they will continue applying the two-tier price level, under which Albanian households will pay 7.7 lek/kWh for a consumption of up to 300 kWh a month and 13.5 lek for each kWh they consume above the 300 kWh threshold (VAT excluded). Average tariffs for business consumers vary from 8.5 lek/ kWh to 10 lek kWh based on low or medium voltage power access. Meanwhile, state institutions pay 11.5 to 14 lek kWh.
Power prices during the past six years have increased by 63 percent climbing from an average of 5.71 kWh in 2005 to 9.53 lek kWh currently.
In its latest country report on Albania, the IMF warns structural problems in the electricity sector are a source of fiscal and growth risks. “Poor collection, electricity theft, and low quality grid affect the sector’s viability. The lack of payment discipline by consumers has also discouraged investment in new generation capacity,” says the IMF.
