How our transport costs are increasing due to expensive oil and toll roads

2024-10-31 07:41:00, Ekonomi CNA

Next year, the government of Albania will engage three new PPP concessions in the Adriatic-Ionian Corridor, which will be built by the private sector against direct payment to the customs office.

By 2025, the number of roads for which user fees will be paid will reach three (Milot-Rrëshen, Thumanë-Kashar, Vlora Tunnel) and after a few years will be at least 6. Comparative data shows that Albania has the highest toll rates on the road

(https://monitor.al/aksi-thumane-kashar-i-katerti-me-i-shtrenjti-ne-59-autostradat-me-pagese-ne-europe/).

In addition, Albania is among the countries with the highest fuel prices globally.

According to global data on oil prices, the average price of oil worldwide is 1.18 US dollars per liter, in Albania it was 1.89 US dollars. Data from October 28, 2024 show that the price of oil in Albania is 60 percent higher than the global average. The data show that Albania ranks third in the world for high oil prices.

Last year, the state budget collected 19.5 billion lek or more than 190 million euros from circulation taxes on oil. This tax, which aims to collect income to be able to afford the maintenance of the roads, provides collection several times more than the needs.

Luigj Alijaj from the Hydrocarbons Association says that Albania taxes oil at least 48 lek per liter more expensive than the Region. High taxation, in addition to reducing competitiveness, inhibits the consumption of the product.

If the price of oil were lower, the budget would not lose from taxes, since part of the businesses and citizens that are currently supplied at the border points of Montenegro, Macedonia and Kosovo would consume in Albania, increasing the circulation and consequently and budget revenues.

Albanian society through direct payments and budget redistribution is paying high costs for roads. Next year, the "Road Transport" program is financed with 33 billion lek, which are taken from general taxes to finance the road infrastructure.

High budget funding, direct road tolls and high oil prices increase transport costs which are vital for the development of a society.

According to Global Petrol Prices the average price of oil globally is currently around 1.1 USD per liter, but there are significant differences in these prices between countries. As a general rule, richer countries have higher prices, while poorer countries and countries that produce and export oil have significantly lower prices.

A notable exception is the US, which is an economically advanced country but has low gas prices. And on the other hand, Albania, as a poor country, has high fuel prices due to high taxes on them.

Differences in prices between countries are due to different taxes and subsidies for oil.

All countries have access to the same oil prices in international markets, but then impose different taxes. As a result, the retail price of diesel is different, according to Petrol Global Prices.

Albania ranks at the top of the list for high oil prices, but on the other hand, its per capita income according to purchasing power is only 34% of the EU average./ Monitor Magazine