“Import prices of diesel and petrol reached their lowest levels in May 2013 with a rising trend in the coming months, but the price decreases were not reflected on the retail market,” says the Authority
TIRANA, Nov. 11 – Albania’s Competition Authority has launched an enquiry into the fuel market after unveiling signs of possible abuse under a price-fixing deal of some key import and wholesale trade companies. The Competition Authority says lower prices of imported fuel in May 2013 were not reflected into lower retail prices.
“Import prices of diesel and petrol reached their lowest levels in May 2013 with a rising trend in the coming months, but the price decreases were not reflected on the retail market,” says the Authority, noting that the price changes among the three main market operators were the same.
The Competition Authority says it has launched a thorough investigation to examine if there are signs of limited competition in the import, production and wholesale trade of fuel during the January 2010-August 2013 period.
Last September, Tirana’s Prosecutor’s office launched an investigation into several petrol stations which a local metrology directorate identified as abusing the amount of fuel drivers buy. The probe was launched after the Metrology Directorate identified abuses with the amount of fuel in 14 petrol stations, four of which in Tirana and after the metrology directorate refused publishing the names of the petrol stations which are alleged to have stolen consumers 500 milliliters of fuel for every 10 litres or 100 lek (Euro 0.7) for every purchase of 2,000 lek (Euro 14).
Abuse of quality and quantity are frequent in Albania’s fuel market. Early in 2011, a massive fraud scheme involving the gasoline and diesel distribution system, selling mixed premium products with inferior byproducts that could have damaged thousands of vehicles and cost consumers millions was unveiled. The probe led to charges for 13 men, both public officials and businesspeople.
With an annual turnover of around 1 billion Euros, the fuel market is one of the biggest industries in the country and has a direct impact on all sectors of the economy. Data from fuel associations show some 160 companies operate in the wholesale oil and liquid gas market and another 1,000 in the retail market, making the market fully liberalized.
Both diesel and petrol prices stand at an almost a historic high of 185 lek/litre (Euro 1.3). Since Jan. 2012 Albanians have been 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.
Starting August 2013, for the first time in Albania, fuel will be marked at minor cost in an effort to strengthen monitoring of the market which has often abused consumers. The process will be carried out by Global Fluids International (GFI), a subsidiary of Canadian-based Eurocontrol which has won a 10-year contract to monitor the quality of fuel in Albania.
While the Association of Fuel Importers had initially described the concession as an unfair monopoly which risks a further increase in fuel prices, some experts say the fuel marking process which will cost an extra 0.74 lek/litre will give a new boost to the market by further modernizing it.
