Oil prices up in anticipation of new tax

TIRANA, July 27 – The majority’s decision to increase the carbon tax for diesel and petrol by 5 lek (3.6 Eurocent) per litre starting from next September has been immediately reflected in the domestic market where oil prices have abusively increased. Local media report diesel prices were up to 162 lek/litre this week, up from 157 lek/litre last weekend despite a slight drop in international markets because of investor unease over the fast-moving eurozone debt crisis. The carbon tax for diesel, currently at 3 lek/litre will increase to 8 lek/litre while the carbon tax for petrol will rise to 6.5 lek/litre, up from 3 lek/litre currently. Starting from January 2012, the carbon tax will increase by another 2 lek/litre or 7 lek compared to current prices, says the Finance Ministry. Government expects to collect an additional 375 million lek from carbon tax in the last four months of this year. The increase in the carbon tax came after majority deputies recently approved in Parliament some changes which lift customs duties for imported cars, making them subject only to the 20 percent value added tax. The current annual traffic and registration taxes car owners pay have been replaced by a new formula similar to that of import in customs procedures. The new draft law excludes cars produced during the past three years from their annual taxes but applies a progressive coefficient of 0.18 for cars produced in 2008 and a +0.01 coefficient for each year before. The new formula increases taxes for cars older than 10 years and keeps annual taxes for newer cars at the same or slightly lower levels.