PRISTINA: Businesses in Kosovo, one of Europe’s economically challenged nations, are facing significant operational hurdles due to a sharp increase in fuel prices, a phenomenon attributed to the ongoing conflict in Iran and its subsequent global economic ripple effects.
Business Operations Under Pressure
Kushtrim Ajvazi, a manager at Pestova company, which manufactures potato chips and snacks for both domestic and export markets, described the unprecedented challenges. The company operates nearly 100 acres of potato fields in eastern Kosovo, supplying raw materials for its popular Vipa brand. The recent surge in wholesale fuel prices, from 1.10 euros to up to 1.7 euros per litre, has severely impacted the firm and its distribution network.
Kosovo, lacking domestic fuel production, relies on importers whose profit margins are legally capped at 12 percent. This situation leaves businesses vulnerable to external price fluctuations. Ajvazi highlighted that the current period, coinciding with the crucial spring potato planting season, demands substantial fuel expenditure. While the company had existing reserves for fertiliser costs, the escalating fuel expenses are causing immense financial strain.
“We are analysing and calculating every additional cost, and if we see that this process of rising costs continues, we will be forced to adjust our prices,” Ajvazi stated, indicating a potential price hike for consumers if the trend persists.
Government Inaction Draws Criticism
Unlike some Balkan neighbours who have implemented measures to mitigate the impact on their agricultural sectors, Kosovo’s government has yet to announce any relief policies. Romania, Hungary, and Serbia, for instance, have introduced special diesel pricing for farmers or reduced state taxes. The Kosovo government has not responded to queries regarding potential interventions.
Economic experts in Kosovo have cautioned the government about the necessity of an urgent response to prevent further economic damage. Economist Safet Gerxhaliu commented, “There is not one sector that is not affected by the price increase.”
Pestova company faces an additional complication with approximately 40 percent of its production being exported under pre-arranged, fixed-price contracts that require a 90-day advance notice for any adjustments. This makes long-term planning difficult in an environment of volatile pricing. Ajvazi appealed to the government for support, emphasizing the company’s role as an exporter to over 23 countries, including those within Europe.
Impact on Citizens
The rise in fuel prices is also placing a significant burden on ordinary citizens. Bardh Mehmeti, an IT professional from the capital, Pristina, reported that his cost for a full tank of fuel has increased from 80 euros to 100 euros. He is now contemplating the acquisition of an electric vehicle.
Kosovo’s economy has faced persistent challenges since its declaration of independence from Serbia in 2008, a situation complicated by Serbia’s non-recognition and stalled European Union accession bids. A prolonged political crisis last year, which left the country without a fully functioning government for an extended period, further exacerbated economic instability. The current administration is reportedly facing another stalemate regarding the election of a new president. The main opposition, the Democratic Party, has criticized the government’s perceived inaction and advocated for temporary tax reductions to alleviate the financial pressure on both citizens and businesses.
❤️ Support Independent Journalism
Your contribution keeps our reporting free, fearless, and accessible to everyone.
Or make a one-time donation
Secure via Razorpay • 12 monthly payments • Cancel anytime before next cycle
(We don't allow anyone to copy content. For Copyright or Use of Content related questions, visit here.)
The Chenab Times News Desk
