Greece cuts fuel prices but impact questioned
Greece's temporary fuel price reduction plan is set to take effect in the coming days, but market experts warn that the measure may offer only limited relief to consumers facing high living costs, according to a report by To Vima.
Prime Minister Kyriakos Mitsotakis announced the intervention in parliament, asking the country's two oil refineries, HELLENiQ ENERGY and Motor Oil, to finance the reductions.
The plan aims to lower gasoline prices by 10 euro cents per liter and diesel prices by 5 euro cents per liter until the end of August. The total cost of the measure is estimated at €40 million.
Deputy Prime Minister Kostis Hatzidakis is expected to provide further details on the implementation, although the two refineries have not yet publicly outlined how the discounts will be applied.
Temporary relief rather than long-term solution
According to petroleum market sources cited by To Vima, the measure will likely be implemented through a mechanism similar to a previous diesel subsidy scheme, with refineries absorbing part of the increase in international fuel prices and keeping wholesale prices lower for fuel suppliers.
The intervention will effectively act as a temporary price cap in the wholesale market. However, experts warn that it does not change the way fuel prices are determined.
If global oil prices continue rising due to geopolitical uncertainty, supply concerns and international market pressures, drivers could again face higher costs once the measure expires.
High taxes limit consumer savings
The main challenge remains Greece's high fuel tax burden, which continues to contribute significantly to elevated prices at the pump.
For unleaded gasoline, taxes and fees account for around 57% of the final price. This means a significant portion of the announced 10-cent reduction is offset by existing taxation.
For diesel fuel, taxes represent nearly 46% of the final price, reducing the overall benefit for consumers.
The measure is expected to provide short-term relief during the summer period, but market analysts say it does not address the deeper causes behind Greece's persistently high fuel prices, as highlighted by To Vima.
