Fuel Consumption Declines as Prices Near Record High
Fuel imports marked an annual decline for the second month in a row in April this year.
According to official data from the Ministry of Finance the high prices are negatively affecting product consumption.
However, the same report shows that fuel imports were above the average of the last decade in April.
According to data from the Ministry of Finance, in April 2022 a total of 42,899 tons of oil were imported from 49,105 tons in April 2021 with an annual decrease of 12.6%. Last year in April fuel imports set historic records, due to the high demand that emerged after the removal of movement restrictions by the Covid-19 pandemic.
As a four-month period, fuel imports decreased by 3 percent. During January-April 2021, 170 thousand tons were imported from about 175 thousand in the same period last year.
Before the war in Ukraine, this year, too, hydrocarbon imports increased in January and February compared to 2021. In the first half of 2022, imports increased by 11%, but the ratios were reversed in March-April, where with the increase of prices began to fall and the amount of imports fell by over 14%.
The decrease in consumption compared to 2021 is coming from high prices. Currently a liter of diesel is being sold in the retail outlets with 248 lek per liter, from 160 lek per liter that were in June 2021. During one year the price of one liter of fuel has increased by 55%.
Market operators claim that the contraction of consumption has been observed in construction companies, working with tenders, which have been curbed at the moment due to the rise in iron prices, which has increased costs, exceeding initial estimates. According to data from international stock exchanges, the price of iron was $ 955 per ton before the start of Russia's attack on Ukraine, while it has now reached $ 1254 per ton, up 31%.
While in cars, according to them, no contraction of consumption has been observed, with the exception of border areas, which fill cars in Kosovo, Northern Macedonia and Montenegro, where oil is traded 30-40% cheaper. In the absence of an efficient and fast public transportation system, the car is not a luxury, but a necessity for many who have work away from home.
Fuels went up in stock markets after Russia's attack on Ukraine, reaching as high as $ 130 a barrel in early March, up from about $ 90 billion in oil in late February. Prices have fluctuated widely these weeks and are currently on a downward trend.
In the domestic market, oil is currently being traded at 248 lek per liter, approaching the maximum record levels of 260 lek, which were reached in early March.
Compared to the end of February, oil prices in the domestic market are 30% higher.
(Source: Monitor)