This week the government approved a 20% reduction in excise duty when the price rises above 200 lek/liter for gasoline and 220 lek/liter for diesel

The Council of Ministers is expected to approve tomorrow a regulatory act providing for a temporary reduction of excise duties on gasoline and diesel in response to the sharp rise in international prices reflected in the domestic market. According to the Ministry of Finance, the intervention in the excise law aims to protect consumers and businesses from the direct effects of the crisis caused by geopolitical developments in the Middle East, which have led to an immediate increase in global oil prices. In this context, the Council of Ministers has also declared a special situation in the hydrocarbon market, activating emergency intervention mechanisms

According to Ekofin.al, the proposed measure to be approved tomorrow provides that when the retail price set by the Transparency Board exceeds 200 lek/liter for gasoline and 220 lek/liter for diesel, the excise level will be reduced to 80% of the current rate, equivalent to a 20% reduction

For 2026, considering indexing, the current excise level for diesel and gasoline is 39.37 lek/liter. Under the proposed regulatory act, the excise level will be 31.5 lek/liter for both products. This measure will take effect automatically only if the total retail price exceeds 200 lek/liter for gasoline and 220 lek/liter for diesel

Based on calculations using fuel prices on the day the special situation came into force, March 20, 2026, this corresponds to a reduction of about 7.9 lek/liter from excise duties alone, while the total effect on the retail price, including VAT reduction, reaches approximately 9.45 lek/liter

According to the price calculation methodology, which includes elements such as international FOB Med prices, exchange rates, taxes, and trade margins, at the time of the special situation declaration, the ceiling price of diesel reached 226 lek/liter and gasoline 196 lek/liter

This situation has pushed the government to intervene with a dual package of measures: initially by setting price ceilings through the Board, limiting wholesale margins to 3 lek and retail margins to 12 lek, and now through fiscal relief via excise reduction

The regulatory act is temporary and will remain in effect only during the special situation period, without creating long-term effects on fiscal policy

The Ministry of Finance notes that the temporary measure’s impact on the budget cannot be precisely calculated due to international market volatility. However, authorities argue that the revenue loss from excise reduction is expected to be partially offset by increased VAT revenues due to higher import prices

This development comes at a time when Albania, like many other countries in the region and the European Union, is using temporary fiscal and regulatory instruments to mitigate the impact of energy price increases on the economy and consumers

“KORÇA BOOM”