After 15 years of having the circulation tax built into the fuel price, the government is signaling a change for 2027. At first glance, the measure is presented as relief for consumers, but the proposed scheme does not appear to reduce the overall burden: the tax removed from the pump is expected to be recovered from vehicles.
What is changing in the 2027 fiscal package
According to the version under discussion for the 2027 fiscal package, the circulation tax could be removed from the price of diesel and gasoline. The government presents the move as a measure aimed at easing the impact of high fuel prices, also influenced by international markets.
However, the change does not necessarily mean a clear reduction in the tax burden. According to information made public, the idea is not for the burden to disappear, but to shift from the liter of fuel to vehicle ownership.
How much the tax currently weighs on the price of diesel
Currently, several charges apply to every liter of fuel. The excise tax is about 39.4 lek per liter, the circulation tax 27 lek, and the carbon tax 3 lek. A 20% VAT is then applied on this base.
Removing only the circulation tax, together with the effect of VAT on it, would theoretically create room for a reduction of up to 32.4 lek per liter for diesel and gasoline. But this is only on paper: the real reduction would depend on how the fiscal effect is passed on to the final price for consumers.
The revenue is not being waived, it is being shifted to cars
The key point of this move is that the budget does not appear ready to give up the revenue currently collected from this tax. According to sources cited in the reporting, the government is considering offsetting it through an increase in the annual vehicle tax.
The scheme foresees an increase for vehicles, a specific increase for luxury vehicles, and the inclusion of electric cars in taxation as well. So, relief at the pump could be followed by a higher bill in annual vehicle payments.
Millions from a tax that changed form in 2011
The circulation tax is one of the items that has generated significant budget revenue. During the 2023-2025 period, average revenue from this tax was about 21.7 billion lek per year, while in 2025 alone it reached about 24.2 billion lek.
This tax was shifted in 2011 from a fixed annual tax to fuel consumption. It was initially set at 5 lek per liter, before gradually rising to 27 lek in 2015, a level that has remained in force until now.
If the plan is approved, the change will directly affect both fuel prices and the cost of owning a vehicle. The essential question remains whether citizens will actually pay less, or simply find the same burden on another bill.
At this stage, the government’s message of relief should be read carefully: removing a tax from the pump does not automatically mean removing it from citizens’ pockets.