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The decline in oil imports deepened further in May, reflecting a gust of consumption from rising prices to record highs.
According to official data from the Ministry of Finance, oil imports in May marked about 44 thousand tons, from more than 49 thousand tons in the same period of 2021, down 18%. This was the strongest decline compared to the previous two months.
For the entire 5-month period, oil imports fell by 6% and the whole phenomenon was concentrated in the last three months of March-May, after the start of the war in Ukraine.
Oil imports were growing rapidly before the war started. In January 2022 imports marked an annual increase of 13% and in February 8.4%, to experience a rapid decline after the Russian attacks on Ukraine began and prices began to rise. In March, imports fell by 16%, in April by 12%, while in May the decline deepened further and imports fell by 17%.
With the start of the war, the price of oil in the domestic market increased by 30 percent in the first week of March, exceeding 245 Lekë per liter. Now oil prices are being set by a board where the government also participates. On Friday, a liter of oil was traded for 265 Lekë per liter or about 40% higher than a year ago.
But market sources claim that oil consumption in Albania has shown that it is resistant to rising prices. The car is considered a necessary tool, due to poor quality public transport. Market players claim that the decline in fuel consumption has been more noticeable in the border districts that have started to be supplied to neighboring countries.
After an aggressive policy of taxation on oil in the last 10 years, Albania has become the country with the highest oil price in the world in relation to purchasing power. But consumption and price have gone hand in hand, because the number of vehicle users has increased during this period.
The war in Ukraine has pushed up commodity prices around the world, but on the other hand consumer behavior is showing changes. In some non-vital products consumption is falling rapidly as spending is concentrating on vital goods.
Various countries are pursuing policies to relieve users from high prices. For example, Germany has recently approved a survey which reduces the monthly subscription for public transport from 80 Euros to 9 Euros for distances up to 50 kilometers, while reducing the excise tax on oil.
Other countries have also taken fiscal measures by reducing fuel taxes.
But, unlike other commodities the impact of high oil prices negatively affects the consumption of the rest of the commodities.
Large increases in oil prices mean a significant decline in household purchasing power, which will have to be absorbed by reducing consumption of non-oil goods and services and reducing savings./Monitor
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