High prices causes drop in Albanian petrol demand

High petrol prices have caused a drop in consumer demand. The Institute of Statistics, INSTAT, has published its report for the second quarter of 2008 noting that petrol sales have fallen by 2.3% this quarter. At the same time, other articles, mainly food products, have enjoyed a huge increase in retail sales.
It is to be noted that this is the first time Albanian consumers have reacted to high petrol prices by reducing its demand. This was to be expected in an Albanian market that offers much higher prices than the global market, where a barrel of oil is selling for $103. Global prices reflect a two month drop in prices after the petrol crisis in June brought the price per barrel to over $160. Since then, prices have fallen by 33% throughout the world, while in Albania local prices have fallen by a mere 3%. However, even such a modest drop is expected to have its impact on the market to further lower prices. Currently, one liter of Eurodiesel in Albania is quoted at 165 ALL, which would be the equivalent of $130 per barrel. Indeed, since reduced global demand has pressured producers to lower prices, it is expected that reduced demand in Albania will prompt petrol importers to do the same.
Meanwhile, Minister of Finance, Ridvan Bode, has announced that a deal between the Ministry of Finance and petrol importers will help further lower petrol retail prices. Importers, then, will determine future retail prices that should reflect global prices and the Ministry of Finance will, then, supervise the implementation of the new deal.
Even though some gas stations have already been fined for not upholding the price agreement, the situation has not changed as prices continue to reflect the petrol crisis of two months ago. It remains to be seen whether the government will be able to stop price speculations in the short-term future.