Albania to subsidize cost of diesel fuel for domestic farmers

TIRANA (SeeNews) – Albania’s Agriculture Ministry has earmarked $3 million to subsidize purchases of excise duty-free diesel fuel by domestic farmers in the first half of next year, a ministry official said yesterday. «Further funds will be allocated in the second half-year,» Agriculture Ministry spokesman Rexhep Shahu told SeeNews. The subsidies will cover the difference between the price of 40 leks ($0.3913/0.327 euro) per liter, at which the diesel fuel will be supplied to farmers, and the 65 leks per liter, at which state-owned oil refinery ARMO sells the fuel, Shahu said. Beneficiaries of the subsidies are farmers using agricultural machines, running greenhouses and dairy processing lines. The project was launched last year but was suspended in September 2005 after abuses were allegedly detected. The center-right coalition government, led by Sali Berisha, that came to power as a result of the July 3 elections, has alleged that some 11 million liters of excise-free diesel fuel had been distributed outside target groups prior to the elections. Since then, the government has introduced a new distribution scheme aimed at avoiding abuses. Albania’s gross domestic product would rise by more than $120 million in the 2005/2006 crop year as a result of the scrapping of excise duties on fuel for farmers, Agim Rrapaj, former head of the Albanian government’s Agribusiness Council (KASH), told SeeNews earlier this year. Agriculture contributes around 25 percent to Albania’s gross domestic product. The government has allocated 4.7 billion leks in spending to the sector in the 2006 draft budget.