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The biggest oil speculator? Government taxes drive the price up to 130 lek even if it were free

2026-03-08 12:55:28Pikëpamje SHKRUAR NGA KLODIAN TOMORRI
Edi Rama

The fiscal regime that the Albanian government applies to fuel is one of the most onerous in the world. In other words, if an Albanian trader were to find free diesel somewhere in Europe or Asia today, its cost at the pump would be 130 lekë or almost 1.4 euros per liter. This is the cost of taxes and transportation.

Currently, the Albanian government charges about 110 lek in taxes per liter of diesel. This includes; excise duty at 40 lek/liter, circulation tax at 27 lek/liter, VAT at 32 lek/liter, other taxes at 10 lek/liter. For comparison, the Kosovo government charges only 73 lek in taxes on a liter of diesel, while that of North Macedonia charges 70 lek.

In short, the price of diesel that Albanian citizens pay today, from taxes alone, is 40 lek per liter higher than in Kosovo and North Macedonia. But the record burden on fuel is only one part of the problem. The other part is related to incremental marginalization. The heavy tax burden becomes even heavier when the price increases.

First, the Value Added Tax goes hand in hand with the price. When a liter of diesel at the pump is sold for 150 lek, the government receives 25 lek of VAT. But when the price of diesel goes to 180 lek, the government receives 30 lek of VAT. The more the citizen is burdened, the more the government benefits.

But VAT is not the only tax that has this behavior. Three years ago, the Albanian government did another trick, linking the excise tax on oil to inflation. So, every year the excise tax on oil in Albania increases by being indexed to inflation. And if at first glance, this seems insignificant, the more years pass, the heavier the excise tax becomes.

To explain it more simply, the excise tax on diesel in Albania was fixed at 37 lek per liter before the law was passed to index it to inflation. In just three years, it has increased by 3 lek and now fluctuates around 40 lek per liter. In just 3 years. So, the more inflation, the more the excise tax and the burden on fuels in general increases and the more taxes the government collects.

The most classic definition of a speculator is that of someone who benefits when others are in trouble. So the question that arises is simple. Who is the biggest speculator in the fuel market? The answer here is more than clear.

It is very easy for the government to reverse the burdensome marginality of taxes and use it as a shock absorber to smooth out price increases. The more the price increases, the more the tax is reduced to keep the burden constant. But it does not do this.

In the end, there is a figure that tells the whole story of fuel prices, and very simply. If the Albanian government taxed oil the same as the government of Kosovo, or that of North Macedonia, today Albanian citizens would buy a liter of oil for 130 lekë. Despite the Iran war.


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