Taxes raise the price of a poor fuel, but its tricks are revealed

Even though there is fear that the fuel price will increase up to 200 lekë per liter, fuel is also sold below-cost, damaging the engines of the cars.

“He (the man over there) has spent a lot because of poor fuel! You should talk to him”, says Altin Shehu, who has been driving the Berat-Tirana line for 24 years, and the sixty liters he needs on a daily basis, he buys with the price of 166 ALL (lekë) per liter. “My (Setra) bus does not care for the poor quality of the fuel, because it is an old model.”

He (the man over there) is a strong 69-year old, who, together with the driver and passengers, is being driven to the parking lot by a bus with a grey smooth and shining bodywork. Thoma Ziu is part of a passengers transportation company under the name “Mangalemplc”, which connects Berat with Tirana – thirty bus owners are shareholders in this company.

At that moment, at that place, in the bus terminal in the capital, for buses which go towards the south of the country, between shareholders there are those that point fingers to Thoma, because he followed the government’s instructions to remove transport vans and use only buses manufactured from the year 2000 and later.

“I regret buying it!” he says, because the bushas become useless, the passengers all get off it, and he gets off after them. The government’s rules were forgotten, he says, counties increased transportation licenses, and the 20-seat vans are now categorized as buses and continue their services, decreasing the workload opportunities for everyone, and are now “fighting one another”. And so, Thoma Ziu is stuck with a 2003 French elegance with an Italian design that goes by the name of Irisbus.

Thoma Ziu regrets buying a new bus for the Berat line. Cause: poor fuel. Photo: Geri Emiri

“I had to change the catalytic converter”, he laments. The catalytic converter is a tin can with gas filters, under the tailpipe of the car’s engine, which is basically responsible for passing or failing the tests for the type of fuel that circulates in this country. Whatever filth is present within the fuel, it leaves it behind in the catalytic converter, and clogs it.

But the bus drivers say that the age of the car conceals the problems of poor fuel. The old ones digest even bad fuel, suffering from other problems brought by long years of use, meanwhile the new ones necessitate a higher quality of fuel.

And everyone is expecting the fuel price to raise to 200 leke per liter very soon.

Vehicle defects fail fuel quality tests

This happens despite the fact that in this country a liter is sold too close to the cost price, so close that is strange how this business even has profit. No matter how much drivers complain about fuel prices, that price should have been higher considering the expenses a gas station has. If you do the math and calculate the price with which it enters Albania – this period has been stable at 68 lekë – and add excise, circulation tax, retail margin, direct tax on consumer, cash register tax, among others, and all these summarized with the VAT, the price per liter should have been near 190 lekë. In fact, it averages at 178 lekë.

All this, without calculating the profit of the gas station.

“The government uses the energy to increase the budgetary income”, says Zef Preçi, who runs the Albanian Center for Economic Research, a non-governmental organization. “The government does not balance between the specific taxes of fuel and the taxes of budgetary income.”

It is one o’clock in the afternoon on a hot day of September. In the bus station the dust rises from the buses that come and go. Setras manufactured in the 1990s. Mercedes with white, crème and blue stripes that must have traveled over and over the roads of Greece upon arrivingto this moment. Even a Breda Menarinibus, whose manufacture stopped since 1994.

“Models from ‘95 and later are rare”, Ziu says. “You find mainly the ones from ’89 and older. There are also the problems with the fuel quality, because the new models have troubles with it. Models from 2000 and later are incorporated with sensors.”

“Their engine feels it really quick”, says Shehu.

Ziu does not represent a special case of damage because of poor fuel in this country. If you ever took your car to the mechanic, the problems caused by the bad fuel which the mechanic can make a list (“soot!!! grime!!!”) can fill up a sealed codex of old.

But in many areas of the country– mainly the Fier-Lezhë axis – during the last spring, you could find fuel priced at 151 lekë per liter. In September,we found fuel priced at 170 lekë and below in four gas stations on the Tirana – Durrës highway.

“We didn’t receive specific complaints to examine the situation for companies which operate with prices below the value of the market or related to the application of such predatory prices from the subjects which operate in the market”, comments the Authority of Competition. Yawn.

Until the beginning of last year, you could find gas stations with a fuel price of under 160 lekë per liter. Now there is a fear that the price will surpass 200 lekë per liter. Photo: Denis Tahiri (February 2018)

First in the region for fuel prices

Because of this tax burden, excluding Greece, which is part of the European Union and has lowered considerably the fiscal evasion due to the sins that got it in crisis, Albania has the highest prices of fuel in the region. Greece prices vary somewhere between 190-200 lekë per liter. In Kosovo, you can find it at 150 lekë, in Macedonia 152 and in Montenegro 166. All these three places have made possible the introduction of the small merchant from Albania who takes a walk over the border and sells fuel in coca cola bottles in Koplik or Kukës, or like that vehicle which, the first Monday of this October approached the van of the Tirana-Peshkopi line in Maqellarë, made it stop, placed a funnel and poured the bottles he brought from Macedonia right in the tank. We buy it with 100 lekë over there and sell it here for 140, say the drivers.

And it happens this way even though, together with Romania, Albania is the only country around that extracts fuel. For the 480 thousand motor vehicles the country has – 437 thousand cars and 7000 buses among them, according to the Institute of Statistics – their engines deteriorate.

One more time: A liter of fuel is imported into Albania with a price of 68 lekë per liter, meanwhile until the moment it ends up to me and you, more costs are added to this price. The excise is 37 lekë, another 27 lekë for the circulation tax and 3 lekë for the carbon tax. The merchant also pays direct taxes – local tax and taxable profit – which sum up to 9 lekë–, meanwhile Pano Soko, familiar with the fuel sector, calculates the operational costs: transport, gas station maintenance, water, lights, and the worker’s wages, in the amount of 17 lekë. The VAT over these costs amounts to 26.8 lekë,and we achieve an approximate total of 187.8 lekë per liter. (See the graphic below)

The price for a liter of fuel in Albania

The economic centric television Scan, which designs and publishes a “fuel stock market”, did not evaluate it lower than 160 before it arrives at the gas stations. Even a unit of economists from the United States, which summarizes the data of the global market, evaluates the fuel price higher that what we pay for it. In their website, Global Petrol Prices, the price extracted from official data, fluctuates on 1,65-1,68 American dollars, 179-182 lekë.

“The highest in the region… among 25 countries with the highest in the world”, said Gjergj Buxhuku of Konfindustria in an email-declaration on Sunday. And then the fuel, he added, “most of it is below standard”, worsening an already bad situation.

As a result, the tricks to make a profit with a price below-cost may be many. There are suspicions that the pumps are calibrated to give you 0,95 liters of fuel when, they swear, without batting an eye, that they did pour you an exact liter. A specialist in the sector says under his breath that the fuel that is brought here is often declared with a higher burning power that it actually has, which means it was imported with a much lower price and it was declared bought more expensively. It is said that crude petroleum extracted from the areas of Patos and Fier happens to be blended with the fuel supply of the gas stations.

Some samples the Albanian Center for Quality Journalism sent last year for analysis confirmed precisely those problems in terms of quality.

Even though the fuel price for cars in Albania is averagely 178 lekë, the costs of fuel for a gas station amount to this price as well or even more. However, there are still gas stations that sell fuel below this price. Where do they make their profit? Photo: Geri Emiri (September 2018)

The bus is a bus and it is for the people. Cars are more suitable for homes and are a showcase, and that is another matter. For his own Mercedes, manufactured in 2004, Altin Shehu says he uses fuel that he buys at 184 lekë per liter.

Thoma Ziu bought his fuel at 176 ALL (lekë) per liter and it amounted to “3000 Euros, together with the catalytic converter.” Now he buys fuel at an average of 181 lekë. “Good quality they say”, he adds. “But it’s not that I am a laboratory myself to measure the fuel quality”.

 

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