Retail fuel prices increased by Lek 10 to Lek 14 during the weekend compared to previous levels. Diesel is currently sold at Lek 229 (Euro 2.5) per liter - up Lek 10 - while gasoline is selling at Lek 219 per liter, up Lek 14.

However, while fuel prices have hit record highs, Albania - unlike other countries in the region that adopted new fiscal measures weeks ago to lower excise taxes - is taking no new steps to cushion the impact of these price hikes. Furthermore, the Normative Act that previously mandated a limited reduction in excise duty is no longer in effect.

In response to rising prices, the government had approved a Normative Act on April 3rd to cut excise duty by 20% if retail prices exceeded Lek 220 per liter for diesel and Lek 200 per liter for gasoline.

The Ministry of Finance explained to Monitor that the decision to implement the excise cut depended on the operations and decisions of the [Fuel Price Transparency] Board. Following a period of price stabilization, the Transparency Board has ceased operations.

Yet, even when the Normative Act was in force, the fiscal measure saw limited application. Earlier, during a plenary session, Minister of Finance Petrit Malaj said the measure had been used only twice, with a calculated financial impact of 37 million lek - or approximately Euro 350,000.

Meanwhile, Albania continues to have the highest fuel prices in the region due to a heavy tax burden - accounting for nearly 50% of the price - and a lack of fiscal relief measures. According to another analysis by Monitor, diesel prices in Albania were recently found to be 30% higher than the regional average; this disparity stems from the high tax burden and the failure to implement fiscal measures, whereas many other countries in the region had reintroduced such measures.

Furthermore, across the region, only excise duty and VAT are applied to the base price of diesel. In some neighboring countries, the excise duty is 2% lower. In North Macedonia, the VAT rate for diesel and gasoline is 18%, though it was reduced to 10% during the period of rising prices.

Kosova also applies an 18% VAT rate. In Montenegro, VAT reaches 21%, yet the country levies only two taxes on diesel - VAT and excise duty - with the latter recently halved as a measure to cushion the impact of price hikes.

In Serbia, the VAT rate is 20%, while the excise duty stood at 59.5 lek per liter prior to the outbreak of war. However, immediately following the start of the conflict in the Middle East, Serbia reduced the excise duty by 25%. The measure was reactivated a few weeks ago.

In Albania, in addition to the high excise duty of 39.4 lek per liter, the 20% VAT, and the lack of fiscal relief measures, two other additional taxes - not applied in neighboring countries - are levied on the price of diesel: a circulation tax of 27 lek per liter and a carbon tax of 3 lek per liter.