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The oil board has members of oligarchs, how it works and why it should be dissolved

2022-10-18 20:22:24Investigim SHKRUAR NGA REDAKSIA VOX
The oil board has members of oligarchs, how it works and why it should be

The rise in oil prices at the end of February and the first days of March, when Russia had just begun its invasion of Ukraine, brought citizens to the streets in protests against the government and the oil oligarchs.

Edi Rama declared for several days in a row that the prices were the consequences of the war, that a barrel of oil was being sold on international markets for up to 120 dollars, from 80-90 dollars that was before the start of the conflict and that the government had nothing to do because the prices were set by the market.

When the protests became large, Rama changed his mind. He announced the establishment of a transparency board that would lower, he said, raise profit margins for both majority and minority oil traders.

"The government will enter into the supply administration, together with the citizens, through the national supply board, where government representatives: the Minister of Finance, the Minister of Infrastructure and Energy, the Director of Taxes, the Director of Customs and the Chairman of the Competition Authority, will to be at the table with 5 representatives chosen by the citizens", said the Government's statement.

The board was established through a normative act that added a chapter on special situations and related measures. According to this change, the Board has 12 members, starting with Minister Delina Ibrahimaj in the capacity of chairperson; the Minister Belinda Balluku, the General Director of Taxes, Ceno Klosi, the General Director of Customs, Genti Gazheli, five representatives from hydrocarbon companies, including 3 representatives from wholesale trading companies and 2 representatives from retail trading of hydrocarbons.

Two representatives at the management level are from the Ministry of Energy and Infrastructure and another representative at the management level is from the Ministry of Finance, represented by Denar Biba, as the head of the Competition Authority, the same authority that did not find any violations even in the import of flour wheat and the block increase in the price of bread.

This means that theoretically, the government has the decision-making board with a majority vote of 7 to 5 against the fuel dealers. But in reality, what happened? Has the board checked Kastrati e Gega, or Kastrati e Gega Bordi? According to point 4 of article 3 of the normative act that established this board, the decision-making of this body is done by a simple majority and the representatives of the Government, who sit in the chairs in front of the representatives of the oil oligarchs as defenders of the public interest, have no right of veto.

Since they control over 75 percent of the majority market and over 75 percent of the minority market, Kastrati and Gega have 4 representatives on this board. The names that participate in the troupe meetings vary, but basically the purpose of controlling the board has been achieved thanks to the votes of other members who on paper represent the public interest, but who have been publicly accused of being connected and controlled by the oligarchs, starting from the two ministers to the directors under them.

From this composition, it is enough for one of the seven representatives of the Government to think like the representatives of the fuel businesses and the decision-making leans towards the oligarchs. What reinforces the conviction that the board is a tool of the companies that have the duopoly of fuels is the fact that rising prices are immediately reflected in retail sales in Albania, while when they decrease, the reflections arrive late and are slow, although the companies declare that they have deposits for thousands of tons of fuel.

As an example, Kastrati Group states that it has deposits in Porto Romano with a capacity of 75,000 tons. The group also has other ground transportation facilities with a capacity of 30,000 tons. Kastrati's objective, according to what he says on the official website, is to increase deposits to 120,000 tons.

But, Kastrati sells the liter of fuel as if he had empty tanks, immediately reflecting the price increase in the stock market. Why? Average daily fuel consumption in Albania, according to last year's data, is about 1750 tons per day. So, as if it does not import at all, only Kastrati's deposits, not including Gega and other companies, supply Albania for about 40 days.

Decision-making without transparency of the board

The board, which promised to be transparent in its decision-making, has never published how its members voted when they determined the level of fuel sales.

Faced with these criticisms, the board published a complex formula for how it calculated the award decision. Here he stated that for reference he took the prices on the Hungarian stock exchange, although most of the oil in Albania is imported from Italy.

However, there are no decisions where the stock market prices could have been fully reflected in Albania. The decision of October 7 is the best proof of this. According to the accounts, oil increased by about 15 lek per liter in foreign markets compared to the price that was sold at the beginning of the month. The board in Albania increased it by 22 lek with only one drop of the pencil.

Another reason why the board is not protecting only the interests of the citizens is the comparisons with the countries of the region. In all these countries, the price of one liter of diesel has not exceeded 2 thousand ALL since the end of March. In Albania, the price has not dropped below this level since the end of February.

The high price also suits the Government, as it collects more in the budget in the form of excise duty and VAT, passing on to the citizens the entire burden of price increases, including their abusive increase, while publicly through the board it creates the impression among citizens that he is protecting them.

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