Claudia Tomorri
Prime Minister Edi Rama has once again revived the project of introducing the state into the fuel market as a mechanism to lower the price of oil. Rama said that a public company will be created, which will import and directly trade fuel in the retail market.
"One of our objectives is to create a new factor in the oil market, a state factor that will ease the burden on citizens. We will create the public factor in the oil market," Rama said.
But can a state-owned company lower prices for citizens, and if so, to what extent?
The price of oil in the retail market is determined by a number of factors. These include the purchase price on the stock exchange, transportation and insurance costs, taxes, and the profit margin.
The stock market price, transportation costs, insurance, and taxes are the same for both the private and the state-owned company. The only factor where the state-owned company can influence the price is the profit margin.
The point is, if private individuals currently earn 6-8 lek per liter, the government can assign the state company a margin of 3-4 lek per liter. So the maximum impact of the state company in reducing the price of oil, as long as taxes remain unchanged, will be 3-4 lek per liter and Albanians will not buy oil for 195 lek per liter as it is today, but will buy it for 191 lek.
But even this reduction is very difficult. The newly created state-owned company will have costs for warehouses, transportation, and points of sale. How will these be financed? Will they be purchased or rented?
In any case, these are additional costs, which will either make it impossible for the state-owned company to lower the price, even by 3 lek per liter, or they will be financed through the back door, but always with public money. The point is, the company can be kept at a loss by selling cheaply, but its losses will still be paid by the citizens.
The government has only one instrument to reduce the price of oil. That is the tax burden, which is the main reason why Albanian citizens pay much more for oil than anyone else in the region, and even in the world.
The taxes that the Albanian government charges on oil are among the highest in the world. And the prime minister's claim that Albania has a circulation tax on oil and not on vehicles like most countries do is a half-truth. Because Albania also has a tax on vehicles. It is what is called the annual car registration tax, which is collected at the time of the roadworthiness test.
If the government wants to lower the price of oil, it just needs to lower taxes. Any other tempting promise with state-owned companies is a beautiful deception and even potentially very damaging, since public companies in Albania are stolen, just like road tenders, energy tenders, AKSHI tenders and everything else public are stolen.
Therefore, the only effect of a state-owned fuel trading company will be to introduce hundreds if not thousands of patronage crooks into the state payroll to eat up citizens' tax money. While citizens will have to do what they always do. To finance the theft of government officials and the schemes of patronage crooks who vegetate throughout the state.
Editorial
