It has been a month since the fuel ceiling prices have been set by the Ministry of Industry, Enterprise and Trade, which, according to experts, has stabilized the prices, but sales have fallen by 25%, and businesses have shrunk.
And while they say that Kosovo has entered a crisis, the experts in the economy sector add that the establishment of ceiling prices for basic products as well as the removal of VAT for these products would be helpful for the citizens.
Economist Edison Jakurti told KosovaPress that setting ceiling prices for fuel was the right policy and this can be seen from the numbers.
“The first effect is the drop in the prices of fuel. One of the functions of ceiling prices is to initially stop the surge of price increases and to reduce prices in case there are abuses in the profit margin… It is a decrease of 10 percent for diesel and some 17 percent for gasoline.. In terms of the function of setting the ceiling price, there is a ban on the further increase of these prices. The price ceiling for basic products should have been set earlier, but even now it is important. The effect will initially be the stopping of the increase in the prices of these products, but if we look at the measurements made by the KAS, there are 22 other products besides diese and gasoline and in ten of these 22 products we already have a drop in prices… We need a little deeper analysis to see if the cost of transportation has been affected, or if the drop in demand has been affected or if the development of the profit margin has been affected, which may have been unfair in this fashionable time that is made by the traders. Setting ceiling prices for fuel has been the right policy and this can be seen from the numbers. The next step that the government is taking to establish ceiling prices for basic products is a very good and a fair step,” he said.
Regarding the removal of excise duty and VAT, he said that the Government can consider this request.
“If there is no alternative as to how this was compensated in the budget, which allows the Government to make a distribution, it is very easy from the opposition’s side, but it is not based on any analysis. I think that the Government should actually raise taxes on some other aspects, it should raise corporate income tax, maybe then a one-off tax on excess profits, which is being discussed in other countries. Of course, the Government could consider removing the VAT for basic products, this would have been more important. Also, the setting of ceiling prices for basic products, which is something I have been advocating since December last year,” he said.
According to him, the Central Bank can affect the minimum reserves of commercial banks and with the movement of reserves, commercial banks affect interest rates which affect the circulation of money, the economy and inflation. He adds that the Central Bank, as far as it has been seen in public, has not taken any action to stabilize the prices.
The former president of the Chamber of Commerce of Kosovo, Safet Gerxhaliu, told KosovaPress that the economic and social situation in Kosovo is quite difficult due to the pandemic and the war in Ukraine.
He adds that it is an institutional obligation to support the citizen in this time of crisis.
“The fact that we have this increase in the price of strategic and elementary products, inflation of 14.1% is another concern, the fact that Kosovo lives on remittances and the Eurozone has been hit by 8.4% inflation is the next concern. In this direction, the first step is that the pandemic and this economic crisis must be depoliticized, secondly, a genuine public-private dialogue must be advanced, because it really does not honor the economic development of Kosovo and the support of the private sector if decisions are always made only by government cabinets and not in genuine dialogue with the private sector. And inflation is not created by the Government, inflation is created, but it is an institutional obligation to fight it and find mechanisms to support the citizen, development, how to have a balance, which will generate positive effects and not only a selective approach…We are facing high prices of strategic and basic products, but I believe that the Government should have alternatives on how to support the citizens and how to minimize the negative effects of the crisis”, he said.
The economic expert says that in addition to the ceiling price measures, there is also a contraction of businesses and a decrease in sales.
“Precautionary measures regarding the freezing or ceiling of the price of diesel, have been an intervention which in the journey towards the European family has probably been identified as a minus, but the other side is being observed, which is a stabilization of the price of diesel. But in addition to this, we have a shrinking of businesses, sales have also fallen by 25%, it must be understood that we have a reduction in staff at gas stations and all this must be an analysis which must be done from the institutional side. It is time when we must be more flexible , but what is missing in Kosovo the most is the lack of real analyses.. Many challenges await us and the key mechanism is the real public-private dialogue, but also with the citizens”, he said.
Furthermore, Gërxaliu asks the Government for a clear statement regarding the crisis in the country.
“The fact that until now we do not have a clear statement that Kosovo is really in crisis is the biggest concern. Kosovo has entered a crisis and this must be accepted, if the presence of the crisis in Kosovo is neglected, Kosovo and the economy will be damaged. It is time when it should be depoliticized, when there should be a discourse or a more proactive approach between the position and the opposition, because in the end Kosovo and the citizens of Kosovo should be above the interests of political parties and votes. Therefore, every action should not be calculated only with votes but with social welfare. It is time when the citizen of Kosovo should feel the hand and help of the state”, he said.