Fuel prices undergo another drop

TIRANA, July 3 – Fuel prices underwent another decrease this week reflecting lower prices in international stock markets due to lower global demand. After reaching a historical record high of 200 lek litres (Euro 1.4) in March 2012, diesel and petrol prices dropped by another 5 lek/litre averaging at 175 lek/litre this week as crude oil price dropped to USD 90 per barrel.
Experts say fuel prices could be lower if the national currency had not lost so much ground against the US dollar. Lek has depreciated by around 10 percent against the US dollar during the past year.
Unaffordable fuel prices have had a direct impact on domestic fuel consumption.
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, 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.
Starting from Jan. 2012 Albanians are paying an extra 7 lek/litre in a new circulation tax, compared to Sept, 2011. The high tax burden, with excise tax currently at 37 lek/litre, VAT at 20 percent, the carbon tax, port taxes and transport expenditure, all contribute to the final high price of oil.