Fuel imports register sharp drop in early 2012

TIRANA, April 24 – Staggering prices have considerable lowered fuel consumption in Albania. Customs Administration data show fuel imports in the first two months of 2012 dropped by 6,253 tonnes to 45,163 tonnes in Jan-Feb 2012, down 12 percent compared to the same period in 2011. The situation compared to 2010 and 2009 appears even worse with imports during the first two months down by 25 percent and 45 percent respectively. The Association of Hydrocarbons explains the situation with a 30 percent drop in domestic consumption and increased domestic production. In late 2011 fuel importers also increased imports because of the additional 2 lek/litre tax which entered into force in Jan. 2012. The postponement of government’s huge tender to provide fuel for all state institutions for one year has also influenced, say association representatives.
Lower imports are also directly influencing in excise and VAT collection. The latest Finance Ministry data show the value added tax (VAT) which is the key indicator measuring domestic consumption remained at the same levels in early 2012 while exports suffered a double digit decline as demand from crisis-hit EU countries, the destination of more than 70 percent of Albanian exports, remains sluggish.
Finance Ministry data show fuel imports dropped by 5.6 percent to 457,300 tonnes in 2011, reflecting the unaffordable prices in the domestic markets.
With fuel prices at historical record high of almost 200 Lek (Euro 1.4), another threat is posed to the country’s economy this year, which international financial institutions such as IMF say will keep Albania on the brink of recession. As domestic consumption fails to recover, the country’s industries are facing higher production costs and a drop in demand.