Fuel prices rose by 6 to 8 lek litre in the first days of January climbing to an average of 190 lek/litre (Euro 1.33) while cigarette prices have increased by an average of 10 to 20 lek (Euro 0.07 to 0.14).
TIRANA, Jan. 7 – The entry into force of the new fiscal package has been accompanied with an immediate increase in fuel and tobacco prices in the first days of January, raising doubts that traders are abusing the increase in excise rates considering the huge amounts of stock and staggering imports in December when the fiscal package was being discussed.
Fuel prices rose by 6 to 8 lek litre in the first days of January climbing to an average of 190 lek/litre (Euro 1.33) while cigarette prices have increased by an average of 10 to 20 lek (Euro 0.07 to 0.14).
While government says it will set up a task force on the inspection of possible abuses, wholesale traders claim the price increases are a result of new customs clearance of the their products from their fiscal warehouses in the first days of January.
Wholesale fuel traders say fuel prices are expected to further increase in the coming days to reflect the full 10 lek/litre increase in the circulation tax and the 2 lek in VAT, a total of 12 lek. Traders dismiss accusations of abuses saying that they pay their excise at the moment fuel is launched into market from their fiscal warehouses where they store fuel after customs clearance.
An increase by 10 lek/litre on the circulation tax on fuel will affect almost everybody and every industry. Government plans to collect an extra 39 million euros from the increase. The circulation tax, currently levied on fuel at 7 lek/litre will increase by 10 lek to 17 lek/litre on both diesel and petrol and risks taking fuel prices to a record high of 200 lek (Euro 1.4)/litre.
The excise rate on tobacco will increase from 70 lek for a 20-cigarette pack to 90 lek. The Finance Ministry estimates that 1,000 cigarettes (50 packs) will be taxed at 4,500 lek starting January 2014, 5,000 lek in 2015, 5,550 lek in 2016 and 6,000 lek in 2017.
The Finance Ministry says that under the EU directive the minimum excise rate on cigarettes should be at 57 percent of the retail prices, compared to the current 34 percent in Albania. The excise tax hand-rolled tobacco will also double to 3,000 lek/kg compared to 1,500 lek/kg currently.
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 it has launched a thorough investigation to examine if there were 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.
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.
