March 11, 2026

by AEA in News

Albania Ranks Highest in Europe for Fuel Costs Relative to Purchasing Power, Doubling Regional Averages

Albania currently has the most expensive automotive fuel in Europe when adjusted for purchasing power and citizen income, imposing a disproportionate economic burden on consumers and businesses alike.

An analysis conducted utilizing 2026 per capita income data from the International Monetary Fund’s (IMF) Global Economic Outlook and current spot prices from Global Petrol Price, reveals a stark disparity between Albanian fuel costs and domestic earning power.

According to the IMF, Albania’s average per capita income for 2026 is projected at $12,000 annually, equating to roughly $33 per day. With domestic retail diesel prices currently hovering around 200 Albanian Lek (ALL) per liter approximately $2.40 at the current exchange rate an average Albanian citizen must allocate a staggering 7.2% of their daily income to purchase a single liter of diesel.

A Stark Regional and European Divide

Data indicates that this 7.2% threshold is the highest financial burden for fuel among all analyzed European nations. When compared to neighboring Balkan states, the economic strain on Albanian consumers is at least twice as high.

For context, purchasing one liter of fuel requires:

3.7% of daily income in Serbia
3.6% in Montenegro
2.8% in Romania
2.5% in Greece (which, despite having one of Europe’s most expensive nominal fuel markets, presents a much lower relative burden due to higher median incomes).

In absolute nominal terms, regional neighbors boast fuel prices averaging 15% to 30% lower than Albania, particularly in Kosovo and North Macedonia.

The contrast is even more pronounced when benchmarked against advanced European economies. In nations like Italy, France, Germany, and Belgium, a liter of fuel typically consumes less than 2% of daily income. Notably, the Netherlands which holds the highest absolute nominal fuel price in Europe requires its citizens to spend only 1.1% of their daily income per liter. This means the relative burden on a Dutch consumer is nearly seven times lower than that of an Albanian.

Even stripping away purchasing power parity, Albania ranks fifth outright in Europe for the highest nominal fuel prices, trailing only the Netherlands, Denmark, Norway, and Switzerland countries where fuel is marginally more expensive by just 10 to 30 cents per liter.

Heavy Taxation and “Rocket and Feather” Pricing Dynamics

Because fuel is a foundational component of transport and logistics, this skewed cost-to-income ratio actively drives up broader commodity prices and exacerbates household expenses. Industry analysts point to two primary domestic drivers for this inflated market: aggressive taxation and asymmetrical price transmission by market operators.

1. The Tax Burden: State levies account for an estimated 60% of the final retail price at the pump. The taxation structure per liter includes:

Excise Tax: 37–38 ALL
Circulation (Turnover) Tax: 27 ALL
Carbon Tax: 3 ALL
Value Added Tax (VAT): 20% applied to the final cumulative price.

2. Asymmetrical Market Responses: The Albanian downstream market consistently exhibits the “rocket and feather” effect. Retail prices react rapidly to upward shocks in global crude and refined product benchmarks, yet reductions are passed on to consumers at a noticeably sluggish pace during global downturns.

During periods of falling international prices in 2019 and 2024, fuel importers and distributors capitalized on the lag in price reflection, expanding their profit margins by 0.5 to 1 percentage point. Market operators routinely exploit the delayed localized response to global price drops, structurally padding profit margins at the expense of end-users.

March 11, 2026

by AEA in News

OECD Launches Strategic Initiative to Modernize South East Europe’s Aging Power Grids

The Organisation for Economic Co-operation and Development (OECD), in partnership with the Delphi Economic Forum, has unveiled a high-level initiative aimed at overhauling the energy and digital landscape of South East Europe.

The project, titled “Electricity, Digital and Regional Interconnectivity in South East Europe,” was officially launched in Thessaloniki—a city historically positioned as a strategic bridge between Europe and the Balkans. The initiative arrives at a critical juncture as the region grapples with inefficient infrastructure and the urgent need for energy security amid shifting geopolitical realities.

Addressing the 14% Efficiency Gap

Data presented at the launch highlighted a stark disparity between the Western Balkans and the broader European Union. OECD Secretary-General Mathias Cormann noted that outdated power grids in the region suffer from electricity losses of approximately 14%, nearly triple the EU average.

The infrastructure deficit is compounded by a slow transition to green energy. Despite significant natural resources, the Western Balkans currently harness only 4% of their solar potential and 2% of their wind potential. Furthermore, regulatory alignment remains a hurdle, with only 48% of relevant EU energy standards currently implemented across the region.

Greece and Romania Spearheading Integration

The project is designed and funded by Greece, with additional co-financing from Romania. For Athens, the initiative reinforces its growing status as a regional energy hub and a net electricity exporter.

Nikos Tsafos, Greece’s Deputy Energy Minister, emphasized that modern energy security is built on three pillars: affordability, strategic autonomy, and robust interconnectivity. This regional push is also deeply tied to EU enlargement. Giorgos Pagoulatos, Greek Ambassador to the OECD, noted that Western Balkan EU accession has gained new urgency. He signaled that regional integration will be a cornerstone of Greece’s upcoming presidency of the Council of the EU in 2027.

A Roadmap to 2027

To bridge the gap, Secretary-General Cormann outlined four strategic priorities for the Western Balkans:

Regulatory Convergence: Full alignment with EU energy frameworks.
Corporate Governance: Strengthening competition and oversight within state-owned utilities.
Infrastructure Modernization: Replacing aging coal-fired plants and upgrading transmission lines.
Digital Transformation: Scaling up smart-meter adoption and renewable energy deployment.

The stakes are high: experts at the event warned that European electricity demand could surge by 60% by 2030. To meet this challenge, the OECD plans to conduct a series of technical workshops across the Balkans, culminating in a comprehensive policy roadmap scheduled for release in 2027.

March 11, 2026

by AEA in News

Balkan power play: why the Western Balkans must ditch Russian fuels and fast-track EU market integration

A short, sharp truth: the Western Balkans sits at the crossroads of Europe’s energy security and its green ambitions, but patchy rules, lingering dependence on Russian fuels and slow market reforms mean the region risks being a weak link rather than a bridge. A new working paper from Bruegel lays out what’s at stake and what needs to happen next.

From leverage to liability: Russian ties still matter

Gas pipeline system in the Western Balkans

The report finds that several Western Balkan states remain exposed to Russian energy influence notably Serbia and Bosnia and Herzegovina on oil and gas which leaves them vulnerable to geopolitical pressure and imported price shocks. Negotiations and occasional extensions of Russian contracts in 2024–25 underline that diversification on paper does not always mean real independence. That dependence isn’t just political theatre: it alters investment choices, weakens bargaining power and complicates alignment with EU rules.

Why this matters beyond the region: the Western Balkans is a major transit corridor for electricity between the EU and Southeast Europe. The paper highlights that as much as “up to 70%” of electricity flows tied to the region actually pass between EU countries a signal that grid interdependence already exists and that isolation is neither realistic nor desirable. Faster regulatory alignment and market coupling would therefore strengthen European system resilience as well as the region’s.

Western Balkan electricity imports and exports (TWh), 2020-2024

Market coupling: planned, stalled, urgent

European market coupling the technical and regulatory merging of power markets is the single policy lever that could deliver immediate gains: better price signals, more efficient dispatch across borders, and a buffer against supply shocks. The Bruegel authors point out that integration planned for the mid-2020s (originally aiming around 2027) is running behind because national rulebooks and market institutions in the Western Balkans are not yet aligned with EU standards. That delay has real costs: lost efficiency, higher system operation expenses, and a slower rollout of renewables.

Day-ahead auction average prices (€/MWh), EU, Norway and Western Balkans, 2024

Uneven green progress leaders and laggards

Not all Western Balkan countries are on the same page when it comes to the green transition. The paper singles out Albania as a regional leader largely because of its hydropower legacy and relatively favorable renewables policies and Montenegro as advanced across several indicators. Meanwhile, solar and wind potential across much of the region remains largely untapped and constrained by underdeveloped grids, weak permitting frameworks and scarcity of private investment. Simply put: the natural resource advantage (sun, wind, hydro) is mostly unexploited.

This mix of actors creates both a challenge and an opportunity. Countries with stronger renewables backbones could become exporters and stabilizers for neighbors but only if cross-border trade is enabled and market rules are harmonised.

Domestic electricity prices (€/MWh), EU, Norway and Western Balkans, 2024 and 2014

Coal’s long shadow political economy vs. emissions

Phasing out coal is politically charged across the Western Balkans. Coal still provides baseload power and jobs in several countries, and switching it off without credible compensation or alternative industrial plans risks social backlash. The paper recommends phased, socially sensitive coal retirement plans tied to clear investment pathways for renewables and grid upgrades. In short: decarbonisation must be realistic and sequenced fast where possible, compensated where needed.

Practical steps the paper recommends (and why policymakers should care)

Accelerate regulatory alignment with the EU. Aligning rules is the low-hanging fruit that unlocks market coupling and immediate efficiency gains. Market reforms are technical, but the payoff — lower costs and stronger security — is political and strategic.
Reduce real dependence on Russian fuels. Diversification must go beyond headline contracts. It requires investments in LNG connections, alternative import routes, and faster roll-out of domestic renewables to reduce import vulnerability.
Design a just coal phase-out. Pair plant retirement timetables with retraining, economic revitalisation, and clean-energy investment envelopes so communities are not left behind.
Mobilise private capital for renewables and grids. Improve permitting, de-risk projects with public guarantees, and create transparent auction frameworks to attract the investors the region needs.

Political and financial headwinds plus a window of opportunity

The paper is candid about constraints: weak institutions, fragmented markets, and geopolitical tensions complicate reform. But it also notes a narrow window where EU enlargement dynamics, conditional funding instruments (the EU Growth Plan for the Western Balkans) and post-Ukraine energy policy realignments create momentum and conditional financing that can be leveraged if countries move quickly and coherently.

Electricity generation mix in the Western Balkans, 2014 and 2024

What success looks like

A successful pathway would see the Western Balkans converge with EU market rules, complete market coupling, significantly reduce Russian fuel exposure, and scale renewables deployment while phasing out coal with social protections. Practically, that means lower wholesale price volatility, better utilisation of regional transmission assets, and an energy sector that attracts investment rather than fears it.

Conclusion integration first, transition faster

The Bruegel working paper’s central message is straightforward: the Western Balkans has the geographic and resource advantages to be a strategic partner for Europe’s energy security and green goals but only if the political will to align rules, diversify supplies and invest in renewables is found. Fast-tracking market coupling and decarbonisation in parallel, not in sequence will deliver both security and economic opportunity. For policymakers in Tirana, Sarajevo, Pristina, Podgorica, Skopje and Belgrade, the choice is clear: remain a transit corridor vulnerable to outside influence, or become a resilient, integrated bridge to Europe’s clean-energy future.

March 5, 2026

by AEA in News

Kosovo Government Caps Fuel Profit Margins After Sudden Price Surge

The Government of Kosovo has introduced new measures to limit the rise in fuel prices after suspicions that market operators were taking advantage of recent developments to increase profits. Through a new decision, authorities have established maximum profit margins per liter for both wholesale and retail fuel sales.

Within just one day, fuel prices in Kosovo increased by more than 20 cents per liter. The rapid price movement followed escalating tensions in the Middle East and disruptions in the global energy supply chain.

However, such a sharp increase over a short period has been widely described as excessive and potentially exploitative. Data from Kosovo Customs indicate that the actual import price of fuel rose only marginally.

According to Customs figures, the import price increased by just 1.5 cents per liter. On Monday, a liter of diesel was imported at 54 cents, while on Tuesday the price rose slightly to 55.6 cents.

Meanwhile, retail prices at fuel stations showed a much larger increase. On Monday, diesel prices ranged between €1.18 and €1.25 per liter. By Wednesday, the same fuel was being sold for between €1.35 and €1.40 per liter. Gasoline prices followed a similar trend, rising from between €1.17 and €1.24 on Monday to as high as €1.35 per liter by Wednesday.

Due to the significant discrepancy between the modest rise in import costs and the sharp increase at fuel stations, the Minister of Trade, Mimoza Kusari-Lila, signed a decision on Wednesday establishing temporary price caps.

Under the decision, the maximum allowed profit margin for wholesale fuel sales is set at 2 euro cents per liter, while the retail margin is capped at 12 euro cents per liter.

According to the ministry, the measure follows continuous monitoring of the oil market, analysis of daily data from Kosovo Customs, and reports from the Central Market Inspectorate, which concluded that increases in import prices were immediately and disproportionately reflected in retail prices. Inspectors will be deployed in the field to oversee the implementation of the decision.

The regulation will enter into force one day after its publication in the Official Gazette.

Maximum Allowed Commercial Margins

Wholesale sales: up to 2 euro cents per liter
Retail sales: up to 12 euro cents per liter

The calculation of these maximum margins is based on Article 4, paragraphs 1.1 and 1.2 of Administrative Instruction No. 03/2022 on the Regulation of Petroleum Product Prices and Renewable Fuels, as well as other protective measures. Authorities stated that the decision was made after assessing current market conditions and within the legal competencies of the ministry.

Earlier on Tuesday, Fadil Berjani, head of the oil traders’ association, warned that geopolitical tensions in the Middle East are directly affecting global oil markets.

According to Berjani, rising tensions and the risk of disruptions in production or transportation are increasing uncertainty in global supply, pushing oil prices higher. Particular attention is being paid to the Strait of Hormuz, one of the most critical oil transit routes in the world. Any disruption in that corridor typically has an immediate impact on markets and translates into higher fuel costs for consumers.

Global oil prices have risen significantly following attacks by Iran on several countries in the Middle East, reportedly in response to bombings carried out by the United States and Israel.

March 5, 2026

by AEA in News

KESCO announces the second phase: businesses enter the open electricity market.

KESCO in Kosovo has announced that, beginning 1 April 2026, the second phase of commercial consumers’ transition to the open electricity market will commence.

From that date, businesses currently supplied under the regulated market will move to the liberalized market and will be able to select their own licensed electricity supplier. The measure is intended to encourage greater competition and reflect market-based pricing.

Under the country’s Electricity Law and at the request of the regulator, businesses that employ more than 50 staff or report an annual turnover exceeding €10 million will no longer be eligible for regulated tariffs under the universal service framework. As a result, KESCO — in its role as Universal Service Supplier — will be unable to continue providing those businesses with regulated-rate supply after 1 April 2026.

According to the company, official records from the Tax Administration indicate that a number of businesses no longer meet the universal-service eligibility criteria. Affected businesses must select a licensed supplier in the open market by 1 April 2026 and initiate the supplier-switching procedure at least 21 working days before the new contract takes effect.

If a business fails to secure a contract within that timeframe, it will be supplied on a temporary basis by the Supplier of Last Resort for up to 60 days. Should no contract be concluded within that period, electricity supply may be disconnected in accordance with applicable legislation.

The company also clarified that self-consumers (prosumers) will no longer remain under the regulated-tariff scheme from the same date; the terms for energy produced and injected into the grid will be set out in the new supplier contract.

Finally, businesses are asked to confirm their employee numbers, annual turnover and active metering units with the company to ensure a smooth transition to the open market.

February 16, 2026

by AEA in News

Bosnia and Herzegovina launches two-year national hydrogen strategy project.

Bosnia and Herzegovina has kicked off a two-year initiative to produce a draft national strategy and roadmap for hydrogen, a project officials say will help steer the country toward a cleaner, more competitive energy system.

The implementation phase of the project — CEI Support to Hydrogen Strategy Development and Know-How Transfer for Bosnia and Herzegovina — opened with an official meeting in Sarajevo. The effort is being carried out by a consortium led by Green Sustainable Solutions (based in Zagreb), the Association for Green Hydrogen and Renewable Energy Sources (H2OIE), state utility Elektroprivreda Bosne i Hercegovine (EPBiH), and local engineering firm Energoinvest. The project receives backing from the Central European Initiative (CEI) and the Ministry of Foreign Affairs and International Cooperation of Italy.

Project partners described the initiative as a decisive step for the country’s energy transition. At the opening meeting they exchanged experience, reviewed European and regional best practices, and reaffirmed their intention to embed hydrogen technologies in long-term national development plans.

According to H2OIE, the programme is designed to strengthen institutional capacity and accelerate knowledge transfer so that hydrogen can be introduced sustainably into the national energy mix. Activities will include expert workshops, study visits to the European Union, advisory missions, and the preparation of the draft national strategy and a practical roadmap.

Those workstreams are intended to map Bosnia and Herzegovina’s hydrogen potential, identify barriers, and define development priorities. Organizers say the roadmap will highlight practical steps for integrating hydrogen across power, industry and transport sectors, and for aligning national regulations with European standards.

Stakeholders argue hydrogen offers a major opportunity to boost energy security and to decarbonize energy-intensive industries. Energoinvest noted the country’s abundant renewable resources, established industrial base and strategic location make hydrogen development a strategically important path for economic and environmental progress.

As the project proceeds over the next two years, officials and experts will aim to translate international know-how into locally tailored policies and investments — positioning the country to compete in regional energy markets and to meet its climate commitments.