Rafuna: Lowering excise duties and abolishing VAT would reduce fuel prices in Kosovo by 30 to 40 percent

President of the Kosovo Chamber of Commerce, Lulzim Rafuna, stated that fuel prices would drop by 30 to 40 percent if the Kosovo government accepts the business community’s proposal to reduce excise duties on petroleum products and abolish value-added tax. He warned that if no measures are taken, fuel prices will continue to rise.

“Taking into account trends in European Union countries, the increase in petroleum product prices, as well as the circumstances of the geopolitical war, we proposed that the Government of the Republic of Kosovo adopt two fiscal measures. The first is reducing the excise duty rate on petroleum products, and the second is the temporary abolition of value-added tax. It is well known that value-added tax is a tax paid by the consumer, not the company, so any reduction or temporary abolition of VAT would mean lower petroleum product prices and greater relief for the citizens of the Republic of Kosovo,” Rafuna told Kosovo Press.

Kosovo businesses have been calling for government intervention for several weeks to curb the rise in petroleum product prices. Prices of petroleum products have been rising significantly since the start of the war in Iran on February 28.

According to analyses by the Kosovo Chamber of Commerce, if these measures are fully implemented, fuel prices could be reduced by 30 to 40 percent.

“Now it depends on the level of reduction, that is, by how many percent excise duties will be reduced, as well as whether value-added tax on petroleum products will be abolished or only reduced. According to our analysis, this would lead to a decrease in fuel prices of around 30 to 40 percent, assuming that excise duties or VAT are fully abolished,” the president of the Kosovo Chamber of Commerce said.

Rafuna warned that, in the absence of concrete measures, further price increases are expected, given geopolitical developments, including tensions in the Middle East and blockages of major oil supply routes.

President of the Kosovo Chamber of Commerce and Industry, Skender Krasniqi, called for a swift response, saying that this is an urgent need.

“The Chamber of Commerce and Industry has called and continues to call on the Government of Kosovo to urgently reduce taxes and excise duties on oil, as many other countries are doing, with the latest example being Italy, in order to achieve a reduction in prices that significantly burden businesses and citizens. This also directly affects the increase in consumer prices as a result of more expensive transport due to rising oil prices. This is an urgent need for a period of at least three months in order to achieve stability, as situations in Iran and around the world may further increase prices beyond their current levels,” Krasniqi said.

At the beginning of the price increases, the Kosovo Ministry of Industry, Entrepreneurship, Trade, and Innovation set profit margins for oil producers at two cents for wholesale and 12 cents for retail.

Minister of Industry, Entrepreneurship, Trade, and Innovation Mimoza Kusari-Lila said that price stabilization is expected in the coming months, especially during the summer.

As a result of the war between the United States and Israel and Iran, fuel prices have also risen to over 1.5 euros per liter of diesel and over 1.3 euros for gasoline.