TIRANA, Feb. 28 – Fuel trading companies have warned a new government initiative to increase license fees on fuel and gas stations by several times risks causing problems in the fuel market and even lead to suspension and closure of activity unless their suggestions are taken into account.
The reaction comes after the country’s Constitutional Court turned down in November 2016 a controversial government decision that increased license fees on fuel and gas stations by a staggering 50-fold, cancelling it, apparently because of violating the principle of proportionality.
In December 2015, the ruling Socialist Party-led government ruled the fee on the granting and renewal of licences on oil and liquid gas stations would increase to 5 million lek (€37,000) for retail oil and gas businesses operating in the municipality of Tirana and to 2 million lek (€15,000) for other municipalities. The previous rates on the five-year licences ranged from 130,000 lek (€940) for the municipality of Tirana to 100,000 lek (€724) in Durres and even lower in other local government units.
In a letter to Energy Minister Damian Gjiknuri following a meeting with ministry officials earlier this week, the Association of Oil Companies says the newly proposed licence fees at 3 million lek (€22,200) for the municipality of Tirana and at 1 million lek (€7,400) for the other 60 municipalities are still high, although at almost half of the previous rates.
“The licence fees at this level are too high, arbitrary, unreasonable and unfounded. The tariff you are seeking to approve is not based on any preliminary study, it is unjustified and does not specify the services that will be offered in exchange for these fees,” says the association, representing more than 1,000 fuel stations with an annual turnover of more than 1 billion euros, half of which goes in taxes that consumers pay in excise, circulation, VAT and carbon taxes.
“In our opinion, the approval of the government decision would cause problems in the functioning of the fuel market, without excluding the option of stoppage/suspension of fuel sales until the association’s suggestions are taken into account and reflected on the government decision,” they add.
The new fees considerably affect the operation of some 1,000 fuel stations in Albania, translating into higher costs for Albanian consumers who already face one of Europe’s highest oil prices.
Due to its high tax burden, at €1.32/litre Albania has one of Europe’s highest oil prices, although being one of Europe’s poorest countries.
The retail fuel market has an annual turnover of more than 1 billion euros, with some importers and traders ranking among the country’s top ten companies.
Albania is a huge oil producer but due its poor quality, it refines only part of its domestic production and exports the majority of it as crude oil. The country’s oil needs are overwhelmingly met through imports which hit a record high of 507,000 metric tons in 2016.
Albanians have been facing higher liquid gas and oil prices in the first days of 2017 as a new excise rate has been imposed on vehicle liquid gas and international oil prices have registered a new increase.
