From regulator to operator, or when the government becomes the main player and the market loses freedom

At a time when the Albanian market must strive to consolidate competition rules, structure relationships among actors, and regain trust after decades of political interventions and ad hoc regulations, the Albanian government announces two policies marking a profound turning point in the economic model pursued so far.
First, it proposes the creation of a state-owned company for intercity public transport, which will act as a direct market operator by providing services itself, while also maintaining the role of regulator through licensing and monitoring private operators.
Second, the government announces its intention to take control of oil imports and distribute it to private entities, positioning itself as the main actor in one of the most strategic and sensitive markets of the economy.

On the surface, these interventions are presented as responses to real problems, such high prices, poor services, or supply insecurity.

But the chosen method to address these issues through nationalizing supply in markets that have not undergone any official competition failure analysis raises serious concerns about economic freedom, the balance of roles in the market, and the very developmental direction Albania is pursuing in its decade of European integration.

International and regional examples do not justify this interventionist approach to the market
In the context of an open economy and European integration aspirations, the proposal to combine in one hand the role of service provider and simultaneously market regulator, as intended in the case of the Fuel Distribution Operator or the Price Monitoring Entity represents a dangerous return to the logic of closed and state-run economies. This model is incompatible not only with free market principles but also with the practices of countries that have undergone or are undergoing transition from centralized economies.

In developed economies, similar interventions have been used only in extreme conditions such as energy crises, pandemics, or critical infrastructure collapses.

In Germany, public intervention was limited to guaranteeing strategic gas reserves during the energy crisis but without turning the state into an active fuel market operator.

In France, public enterprises operate in strategic sectors but respect competition rules and are subject to EU state aid control.

In Italy, the provision of public services including energy and transport is done through open competitive contracts, where state operators compete on equal terms with the private sector.

In the Balkans and developing countries with structures comparable to Albania, the same applies regarding the state’s role in the economy.

In North Macedonia, state interventions in the energy market are limited to regulating basic tariffs for vulnerable consumers, and there is no public entity distributing fuel in competition with the market.

In Serbia, public enterprises such as “Naftna Industrija Srbije” operate in liberalized markets and are partially privatized, operating on business criteria rather than as instruments of daily policy.

In Georgia, state interventions in the energy sector occurred only after deep crises, and even then, international institutions demanded limiting the state’s role as a market operator.

Thus, none of these countries, whether EU members or in the process of integration have built models where the state both accumulates, distributes, and simultaneously controls prices, placing itself in privileged positions vis-à-vis the private sector.

This mixing of functions, as intended in Albania, is not a temporary solution for an emergency situation but a disguised form of market nationalization with long-term consequences:

• Damage to fair competition,
• Distortion of market signals,
• Hindrance to private investments,
• Increased perception of regulatory risk.

Instead of creating a protective mechanism for consumers, this model risks becoming an instrument of market capture and further deepening business environment uncertainties.

A dangerous turning point: Risks of the state model in the open Albanian market

While the Albanian government announces the return of direct intervention in strategic sectors such as public transport and the fuel market, the risk lies not only in breaching the balance between the state and the market but in the gradual transformation of the development model. After a long period of efforts to create an open, competitive, and investment-attractive market, this state model risks undoing some of the foundations Albania has tried to build.

First is the distortion of competition as an institutional failure. Creating a state operator in a market where private companies already operate challenges not only the equality of playing conditions but also the regulatory authority itself, which must guarantee fair competition. Such intervention was seen in Serbia when the state-owned oil company “NIS” gained preferential access to supply and infrastructure, causing many foreign companies to withdraw from the market. This precedent shows that the presence of a publicly privileged actor does not help competition but systematically distorts it.

Second, there are artificial prices that hide the real cost. One of the most used arguments to justify this model is lowering prices for consumers. But this reduction is often illusory and temporary. In Kosovo, subsidizing the public company “Trafiku Urban” led to low tariffs but with permanent losses covered by the state budget. Instead of reflecting efficiency, this system created dependency on public funds, hiding the real cost paid by citizens through taxes, not through tickets.

Third is the discouragement of private and foreign investments. Investors seek predictable rules, fair competition, and clear roles between the public and private sectors. When the state becomes both player and regulator, it sends a confusing and negative signal to the market. In Albania, a similar scenario was seen with intervention in the construction market where the state’s role as a beneficiary through direct contracts lowered the confidence of new investors. Markets that develop based on fear and uncertainty cannot build sustainable development.

Fourth is the increased risk of rising informality and possible bankruptcy of small actors. In a market where the state offers products with controlled prices and unclear fiscal benefits, small operators have no real chance to compete. Consequently, they are pushed toward informality, tax avoidance, or exit from the market. Such a situation was observed in North Macedonia when public interventions in the electricity market sidelined many private actors, increasing dependence on a single supplier and weakening the entire surrounding economic chain.

Instead of serving as interventions to correct market failures, policies that position the state as the main service provider risk deepening existing problems. Albania still has the opportunity to build a model where the state guarantees clear rules, punishes abuses, and supports competition without becoming the very actor that undermines all these.

In this climate of one-sided policy-making, the main concern is not merely the lack of formal consultation but how this excludes market logic and deepens existing distortions in its functioning. Albania is not facing such interventions for the first time.

The examples are fresh.

Price control boards for fuel and basic products, which were presented as temporary mechanisms but in fact set prices arbitrarily and outside any competitive logic, created privileged beneficiaries, sidelined small actors, and increased uncertainty for investors. Decision-making without transparency, analysis, and participation not only harms trust in market rules but turns the state into the largest and most unpredictable economic actor.

This is the clearest sign of a distorted market, where policies replace competition and economic sustainability succumbs to governmental arbitrariness. If this model persists, the risk is that Albania will slide toward a command economy through clientelism rather than one regulated by law and equality in the market.

This makes urgent the need to halt the current imposition process, restore genuine consultation, and return economic development to a path where transparency and competition are pillars, not obstacles.