The government is considering restoring the diesel subsidy – Diesel more expensive than unleaded across Europe

By Chrysostomos Tsoufis

Two weeks after the withdrawal of the diesel subsidy, the government is forced by the developments to change its plan and now – as the Prime Minister said from the floor of the Parliament – is very seriously considering reinstating the measure.

What happened in those two weeks? Against the government’s forecasts for a fall in international prices, the price of black gold jumped almost 10% from $85/barrel to $93/yesterday (moved slightly lower today). OPEC+ had a hand in making this happen, which decided to reduce daily global oil production. At the same time, its demand began to increase as many industrial units across Europe abandoned natural gas and began to consume oil.

Somehow, the price of diesel began to rise rapidly, even surpassing the price of unleaded oil. It is characteristic that October entered with an average pan-Hellenic price of €1.98/liter for unleaded and €1.85/liter for diesel. Until yesterday’s billing, the situation had changed drastically. Lead-free was found in €2.03/litre (2.5% increase) and oil had shot up to €2.12/litre (an increase of 14.6%).

This phenomenon is not only valid in Greece but now valid pan-European. Only in Malta and Estonia (but with a “lead” of just one minute) unleaded remains more expensive than diesel.

The amount of the subsidy will depend on how the international prices will develop and also the fiscal margins. However, as the prime minister clarified the possibility of reducing some indirect tax, VAT or VAT, is not even discussed as it is of doubtful effectiveness but also extremely costly for the state budget.

Of course, the data shows that a possible tax reduction would be a big relief for consumers. Let’s take the price of unleaded for example. With taxes Greece is the 4th most expensive country in Europe behind only Denmark, Finland and Sweden with an average price of around €2.02. Without taxes, the country falls to the middle of the ranking, 14th out of 27, with an average price of just 91 euro cents!.

Closer to the government’s estimates than it seemed in the previous days, the distribution price of heating oil near €1.37-1.38/liter premiered. In order to do this, of course, apart from the horizontal subsidy of 25 cents from the state budget, the ELPE refineries (now HELLENIQ ENERGY) had to pay 7.5 cents per liter, while they also gave an additional 5% discount to the EKO subsidiary so that it can sell heating oil at €1.33/litre.

According to information, the companies of the MOTOROIL group (AVIN, SHELL and CYCLON) will adjust their tariffs accordingly.

Read the News today and get the latest news.
Follow Skai.gr on Google News and be the first to know all the news.