Through this paper we are traveling to analyse the Albanian oil market and its dependence on imports.
Oil is a really of import merchandise as a necessary good in the productive procedure which sustains economic growing. So the demand for oil is in higher degrees in the most developed states such as United States of America ( USA ) , China and Japan.In our state the demand for oil has increased, particularly related to the increase of the economic growing. The internal production covers merely the 20 % of the entire demand of oil, so the 80 % of it comes covered by the imports, so our dependence on imports is comparatively high. Because of this the internal monetary value of oil is extremely related to every development in the universe oil market. We are traveling to analyse this dependence on imports and the impact of the universe market on our internal market farther at our paper.
At first were traveling to speak about universe oil market and give an overview of this market, so to understand how the universe oils monetary value reflects on the domestic market. After this we are traveling to analyse the Albanian oil market by giving a whole image of it: demand, supply and monetary value. But we will travel even farther by comparing the state of affairs in Albania with the universe market. At the terminal of the paper we would hold explained why the Albanian oil market is in the manner it is, how the internal monetary values reflect the universe 1s.
2. World Oil Market
Today, in the universe market, oil is one of the most used merchandises due to advanced engineerings that occur every twenty-four hours. First of wholly, it ‘s consumed by autos, and following up to mills etc, but being a non-renewable resource, someday it will make its peak production.
The oil -sale market estimates its monetary value for a gross-barrel. Increasing of oil monetary values, due to planetary crisis makes investors to put less, until the economic systems of states are more secure. No consumer or concern is able to do long term programs because the monetary value recreation of fuel makes living unsecure. Consequently the uncertainness in the economic system grows and people tend to protect themselves, by cut downing ingestion.
1 World Oil Consumers
The chief consumers of the oil demand, at around 2/3 of production, are the most industrialised states as stated above:Tab.1 Consumers of oilUSAChinaJapanSoviet unionGermany20,680,0007,578,0005,007,0002,858,0002,600,000Beginning: State Master ( 2007 )( Its measurement unit is in million barrels / twenty-four hours )As seen from the tabular array, the chief state in oil ingestion is USA, this due to the fact that she is one of the most industrialised states in the universe.The biggest portion of oil ingestion in the United States goes for transit and USA has more vehicles per capita from any other state in the universe this is one of the chief grounds why United States it ‘s the first of oil ingestion but it ‘s non the lone 1. After transit the most of oil ingestion goes for infinite warming and power bring forthing since USA is the 3rd state sing population a batch of oil it ‘s necessary. The economic system of United States is the largest national economic system in the universe and industries and different concerns need a considerable sum of oil to run. Those are some of the chief grounds why United States it ‘s in the first topographic point sing oil ingestion and following up we have states like China, Japan, Russia, Germany, which have a high demand every bit good.
2.2 World Oil Manufacturers
Organization of Oil Exporting Countries ( OPEC ) , trust of oil bring forthing states, produces at approximately 40 % of rough oil day-to-day ingestion and at approximately 65 % of gas militias. OPEC is the group of the richest states which coordinate oil production policies. The largest resources of planetary supply are as follows:Tab.
2 Producers of oilSAUDI ARABIASoviet unionUSAIranChina10,780,0009,790,0008,514,0004,174,0003,973,000Beginning: State Master ( 2007 )( Its measurement unit is million barrels /day )The in-between East it ‘s the most critical supply of oil and natural gas in the universe and it is obvious from the informations presented in Tab nr.2 that Saudi Arabia leads in the production and extraction of oil, since it is highly rich in oil militias and resources, but it ‘s deserving adverting that Saudi Arabia has the lowest cost of bring forthing oil in the universe this makes it a profitable concern but surely non to be left behind are Russia and other states as good.
3. Albanian Oil Market
Albanian oil market has been liberalized since 1999 and is defined by jurisprudence: N.8450 / 24.02.99, determination of the Council of curates 129 / 18.03.
99 and amendment 179 / 25.04.02Recently, oil monetary value, in the international market, has experienced a decrease, which is non reflected in the Albanian market.
Harmonizing to Minister of Economy Ridvan Bode it is noticeable in the difference of the oil monetary value between international degrees ( 44 dollars/ twenty-four hours ) , and the domestic market ( presently 130 lek/ cubic decimeter ) . Besides harmonizing to the same beginning a few months ago, the Albanian market was characterized by a stable period, but recently we notice an addition of 2 to 3 lek / l. This was obtained as a consequence of domestic currency depreciation, and besides because of the monetary value growing in scholarship. Increasing the monetary value brings a supply daze, hence brings an increase of the input cost, and that of production.
So an addition of the oil monetary value is followed by a decrease of grosss and a decrease of outgos for other goods.Harmonizing to Erion Brace the one-year income it ‘s:For The extraction of oil operate 3 companies: “ Bankers ” -78 mln a‚¬ ; “ ALBPETROL ” -56.6 mln a‚¬ ; and “ Oil & A ; Gas Stream ”For the processing is one company: ARMO-182.6 mln a‚¬ ;For the dismissal, storage and transit it ‘s one company: LA PETROLIFERA- 32.4 mln a‚¬ ;For the trading are six companies: KASTPETROL- 93.1 mln a‚¬ ; TACI OIL- 81.6 mln a‚¬ ; VILOIL-76 mln a‚¬ ; GLOBAL- 47.
7 mln a‚¬ ; MAMIDOIL-33 mln a‚¬ ; EKO A2- 17.7 mln a‚¬ ;The Search of oil is really in a monopoly conditionsIn this market, the Government has contracted 3 companies but one the Swiss company DWM Petroleum AG has won the governmental understanding with the right to exert the activity of research in over 80 % of the district.The Extraction of oil is liberalized and in this field 3 companies are runing, “ Bankers Petroleum ” ( country of Patos-Marinez ) , “ Oil & A ; Gas Stream ” ( in 4 sedimentations, Hekal, Cakran, Kocul, Delvine ) , Albpetrol ( a little portion of sedimentations )The Processing of oil within the district of Albania is practically a monopoly, because of a denationalization procedure from authorities with the Armo Oil Company.Deposit of oil consequences by and large liberalized service, although the company Petrolifera Italo-Albanese, has the sole power in the country South of the state, marine portion, for dismissal, storage, transit of oil by working established works in Vlora.
4. The Demand
This subdivision will be based chiefly on the informations of Index Mund ( 2009 ) . In Albania, oil has more than 300,000 day-to-day consumers. This ingestion from twelvemonth to twelvemonth it undergoes growing because oil additions more and more importance in the consumers ‘ lives. The figure of concerns grows twenty-four hours by twenty-four hours, as the figure of vehicles that use oil as fuel does every bit good.
This brings an addition in the oil demand where without it many activities would non be carried out and different demands would non be fulfilled. In Albania, 70 % of oil ingestion goes to transport, 25 % to industries, and 5 % for other demands.To look into the ingestion of oil and its public presentation during the last old ages, we have presented below a diagram where the horizontal axis bases for the old ages and the perpendicular one for ingestion.Fig.1 Oil ingestion in bbl/day 2005-2009Beginning: Index Mundi ( 2009 )As seen from the graph, the demand of oil from 2005-2009 bit by bit grows, the grounds of which were mentioned supra. In 2005, oil ingestion was 7500 BBL / twenty-four hours.In 2006, ingestion has increased up to 25.200 BBL / twenty-four hours, which has remained stable even in the undermentioned twelvemonth.
So there has been a really high growing in 12 months. While in 2008, it has increased, even though in lower degrees, and has reached 30.900 BBL / twenty-four hours. In 2009 it has increased really somewhat from 2008 and has reached about 31.000 BBL / twenty-four hours. So it is apparent that go throughing from 2005 to 2006, the oil demand has been turning really fast, which means that the gait of the economic development and our prosperity has grown every bit good and accordingly has increased the demand for fuel, the oil.
5. The Supply
The oil supply consists of domestic production and imports. Harmonizing to the one-year study of competition authorization ( 2009 ) . In Albania, different companies operate in the oil market but of the greatest importance is Taci Oil with 48.03 % and Kast Petrol with 44.17 % .
The others companies which occupy a little portion of the hydrocarbons market are Europetrol 4.50 % , Ada Petrol 1.30 % , Global Petroleum 0.99 % , Alpin SHA 0.73 % and Kin Albania 0.28 % .In the undermentioned diagram, we are showing the domestic production from 2005-2009 where the horizontal axis bases for the old ages and the perpendicular one for the sum produced.
5.1 Domestic production
Fig.2 Oil domestic production in bbl/day 2005-2009Beginning: Index Mundi ( 2009 )Domestic production, as shown by Fig.2, during 2005 was 2000 bbl / twenty-four hours.
Subsequently on has experienced a growing from 2005 to 2006 and reached 3500 BBL / twenty-four hours. During 2006 and 2007, the domestic production has non changed and remained 3500 BBL / twenty-four hours. While during 2008 and 2009, the domestic production incurred a considerable increase, which reached its extremum with 6425 BBL / twenty-four hours. This growing was attained due to the increasing of oil demand.
The difference between export and import represent the balance of trade. We have a demand for import when domestic measure demands exceeds domestic measure supplied, or when the monetary value of the good in other states is lower than in the domestic market.
An export is a merchandise shipped from a state into another state.Nx =X – IA favourable balance of trade is known as a trade excess and consists of exporting more than it ‘s importing, an unfavourable balance of trade is known as trade shortage that happens when imports are more than exports.Our state has few militias of this merchandise, which means that domestic production can non carry through the demands of the domestic market. As a consequence it is necessary that most of this merchandise is to be imported from other states. As a consequence our oil monetary value in the domestic market is really connected to the developments of the universe market. Since the domestic importers do non hold sufficient stocks to protect the consumers from monetary value alterations in international markets, the alteration of the latter has an immediate influence in the domestic market.
Fig. 3 Measure of imported oil in bbl/day 2005-2009Beginning: Index Mundi ( 2009 )As we see in fig.3 the measure of imported oil in 2005 has been much smaller than the import of oil in the coming old ages. So, in 2005 the measure of imported oil was about 5500 bbl/day and the following twelvemonth this measure was increased in 21600 bbl/day equal with the imports in 2007, 4 times bigger than in 2005. In 2008 and 2009 this measure was in the same degree, and of class bigger than the old old ages, accomplishing 24860 bbl/day.
We can see that the import of oil has increased during 2005-2009, holding a bigger increscent during 2006 compared to the old twelvemonth. This increscent was related to the increase of the economic growing during these old ages.To analyze the dependence on oil imports of Albania we have divided the sum of imports to the sum of ingestion severally:Each Year: Imports/Consumption * 100 %Year 2005: 5500/7500 * 100 % = 73.3 %Year 2006: 21600/25200 * 100 % = 85.7 %Year 2007: 21600/25200 * 100 % = 85.7 %Year 2008: 24860/30900 * 100 % = 80.4 %Year 2009: 24860/31000 * 100 % = 80.1 %As we see Albanian depedendency on imports it has come ever bigger.
In 2005 has been 73.3 % and in the 2006 has had the biggest growing with 12.4 % this has come as a consequence that oil demand has had a large growing and domestic production a smaller 1.
In 2007 dependence was changeless but in 2008 we had a little reducement of 5 % , this as a consequence that domestic production had a greater addition than the ingestion and in 2009 we had another ruducement of 0.3 % .
As we analyzed the universe and Albanian oil market, we conclude that oil is a really of import merchandise, as a necessary good in the productive procedure. Albanian oil market is an oligopoly, because merely three large companies operate in this market.As a consequence of the little sum of oil produced in our state, the sum of imported oil is in high degree and it comes bigger but the last two old ages the dependence it ‘s 5 % lower this as a consequence that the domestic production had a greater addition than the ingestion.
As mentioned above the imports cover the 80 % of the entire demand, which means that the import of oil is a necessity for the Albanian economic system.Even though the increscent of the universe oil monetary value the demand for oil has had ever an increasing inclination ; which confirms the inelasticity of demand, usual fluctuations in monetary values does n’t cut down selling.
Market: Market it ‘s a topographic point where is voluntary purchasing and merchandising of goods, services or both.Demand: Represent the measure of good or serve a consumer is ready and capable to purchase for a certain monetary value.Supply: Represent the measure of good or serve a manufacturer is ready and capable to offer for a certain monetary valueDomestic Production: Goods and services produced in a stateImports It ‘s a merchandise or service that a state gets from another state because of better quality or lower monetary valueExports: Are goods that a state produces more than it can devour in order to transport in other states for a net income.Balance of trade: It ‘s the difference between pecuniary value of exports and imports of end product in an economic system over a certain period.