High fuel prices are putting pressure on consumption, although historical data show that the retail sale of diesel in our country has not been affected by price changes. 

Official data from the Ministry of Finance show that in March 2022 fuel imports were 39 thousand tons with a decrease of 16 percent compared to March 2021, but they still remain high compared to the same month of 2015-2019. . 

For the entire first quarter of 2022, oil imports experienced an annual increase of only 0.8 percent. Oil imports were growing rapidly before the war in Ukraine began. In January 2022 imports marked an annual increase of 13% and in February 8.4%, to experience a rapid decline after the Russian attacks on Ukraine began and prices began to rise. 

With the start of the war, the price of oil in the domestic market increased by 30 percent in the first week of March, exceeding 245 ALL per liter. Now oil prices are being set by a government board. Today a liter of oil is 243 ALL per liter or about 30% higher than a year ago. 

Market sources claim that oil consumption in Albania has shown that it is resistant to rising prices. The car is considered a necessary tool, due to poor quality public transport. Market players claim that the decline in fuel consumption has been more noticeable in the construction sector, which has currently suspended activity due to the rise in prices of raw materials such as iron, which has affected especially companies working with tenders, which had calculate costs at older prices. While vehicle consumption has decreased mainly in border areas due to their users are being supplied to neighboring countries, where oil costs cheaper. 

After an aggressive policy of taxation on oil in the last 10 years, Albania has become the country with the highest oil price in the world in relation to purchasing power. But consumption and price have gone hand in hand, because the number of vehicle users has increased during this period. 

The war in Ukraine has pushed up commodity prices around the world, but on the other hand consumer behavior is showing changes. In some non-vital products consumption is falling rapidly as spending is focusing on vital goods. 

The Financial Times noted that the cost of food, fuel and housing has risen dramatically, but the global trend of curbing purchases is being observed. Consumers around the world have begun to reduce their spending on anything that is not absolutely necessary. 

Evidence for this phenomenon is more evident in developing countries, where rising commodity prices (which become even more expensive when prices are set in devalued currencies) have led to power outages, food insecurity. 

In late March, Apple announced plans to cut production of the iPhone SE by 20 percent as the war in Ukraine and rising inflation were cutting consumer spending around the world. 

(Source: Monitor)