TIRANA, July 9 – The introduction of an excise rate on liquefied petroleum gas-powered vehicles cost Albanian owners of those cars at least an extra €8 million last year, the government says.
Households who massively use liquid gas as a cheaper alternative to electricity are also estimated to have been considerably negatively affected at a higher level, but no information is available about that as household consumers are officially stripped of the excise duty rate, but indirectly face the tax when filling up their cylinders at liquid gas stations operating within fuel stations.
With few authorized gas points for household use, liquefied petroleum gas, LPG, continues being massively traded in cylinders from the same filling stations for both car and household consumption, despite warnings by authorities to stop sales to households from vehicle gas points at fuel stations.
In a report examining the performance of the 2017 budget, the finance ministry says the 8 lek (€0.063)/litre excise rate that officially became effective in January 2017 cost owners of gas-powered vehicles an extra 1 billion lek (€7.9 million) in extra excise duty and value added tax last year.
Tax authorities say Albania imported 95,000 metric tons of liquid gas intended for LPG-powered vehicles in 2017 out of a total import of 120,000 metric tons of liquid gas, which according to finance ministry figures controversially puts some 80 percent of liquid gas imports in the country as destined for gas-powered cars.
However, only 3 percent of some 500,000 motor vehicles, some 15,000, are estimated to run on liquid gas in Albania, saving about 30 to 50 percent in consumption costs compared to running on diesel or petrol.
Liquid gas is massively used as a cheaper alternative for heating and cooking, especially by businesses and rural area households.
In its 2017 draft budget report, the Albanian government said only 25,000 metric tons of liquid gas annually, about a quarter of total liquid gas imports, is destined for gas-powered vehicles and expected the hike initially proposed at 13 lek (€0.1)/litre, but later reduced to 8 lek (€0.063)/litre to have a modest positive effect of an extra 600 million lek (€4.7 mln) in the 2017 budget revenues.
Liquid gas in Albania currently trades at about 60 lek/litre, but prices are expected to significantly drop by 2020 when the major Trans Adriatic Pipeline already in its final construction stage, makes the first deliveries of Caspian gas to Europe, although the country has to build adequate infrastructure to make full use of it.
Meanwhile, due to the high tax burden levied on fuel, Albania’s oil prices currently stand at about 175 lek (€1.38)/litre, making them one of Europe’s highest, despite Albania’s per capita GDP and consumption standing at only about a third of the EU average.
Liquid gas in Albania is currently imported through two concession ports in Durres and Vlora whose owners are also involved in the storage, import and wholesale trade, raising concerns about the efficiency of the 30-year build-own-transfer concessions awarded in the early 2000s.
Reduced levels of excise duties introduced on domestically produced tobacco, commonly traded informally, and legal changes reducing the level of the reference prices of what are considered luxury cars, only brought an extra modest amount of 84 million lek (€663,000) in extra income for 2017.
