Greece set to extend diesel subsidy into September
Government economic officials are expected to make a final decision by Monday, August 31, at the latest, according to reports. The level of the subsidy will largely depend on whether Greece’s major refineries continue offering discounts on fuel.
Government weighs extension of €0.10-per-liter diesel subsidy
The Greek state currently subsidizes diesel at the pump by €0.10 per liter, with the measure scheduled to expire on August 31.
Since July 14, the country’s refineries have also been providing discounts of €0.05 per liter on diesel and €0.10 per liter on unleaded gasoline. These refinery discounts are also due to expire at the end of August.
According to sources cited in the report, the government is closely monitoring Brent crude prices on a daily basis as it considers how to respond to continued pressure on fuel prices.
Current indications suggest that the government is prepared to extend the €0.10-per-liter state subsidy for diesel. However, officials are waiting for decisions from HELLENiQ ENERGY and Motor Oil Hellas before determining whether the existing level of support will be maintained.
If the refineries discontinue their discounts, the government could opt for a higher diesel subsidy.
Refineries yet to decide on fuel discounts
Motor Oil Deputy CEO Petros Tzannetakis recently declined to provide a clear indication of whether the refinery group would extend its fuel discounts.
Speaking during a conference call with analysts, Tzannetakis said no decision had been made at that point and indicated that the company would make its final choice during the following week, when the current discount period expires.
The refineries are estimated to have absorbed approximately €40 million in costs through the discounts.
Fuel subsidies reach €370 million
Since the beginning of the war in the Persian Gulf, the Greek state and refineries have spent a combined €370 million on measures aimed at absorbing increases in fuel prices.
Despite this spending, diesel prices remain significantly higher than they were when the conflict began on February 28.
The nationwide average price of diesel has risen by €0.477 per liter, from €1.565 to €2.042 per liter, according to fuel price data cited in the report.
Unleaded gasoline has increased by €0.282 per liter over the same period, rising from €1.751 to €2.033 per liter.
The figures indicate that subsidies have so far provided mainly temporary relief from higher fuel costs, while the option of reducing fuel taxes has remained off the government’s agenda.
