Significant increase in heating oil sales due to falling prices – Decreased gasoline consumption

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The decline in fuel prices led to a boost in demand for heating oil, but not for gasoline, where consumption remains low.

The price of unleaded petrol has fallen by almost 60 cents per liter in the last six months, as a result of the reduction in international prices, while overall prices of fuel – and especially heating oil – are close to pre-Ukrainian crisis levels.

The decline in prices, as pointed out by market players, led to a boost in demand for the heating oil but not for her petrol where consumptions remain reduced.

According to the data of the price observatory of the Ministry of Development, the average price of unleaded was last Thursday, December 15 (national average), 1.837 euros per liter against 2.425 euros which was the highest on June 15. The price therefore fell during this period by 58.8 cents per litre, or 24%.

Accordingly, diesel fuel fell by 27.9 minutes to 1.785 euros per liter from 2.064 in June and LPG to 0.962 euros from 1.112. The de-escalation in the price of heating oil is also significant as the winter season started at 1.412 euros, while now the price has fallen to 1.108 (-30.4 minutes).

Essentially, prices have returned to the level they were at before Russia’s invasion of Ukraine (indicatively, at the beginning of February unleaded cost 1.861 euros per liter, motor diesel 1.603 and heating diesel 1.255 euros). The declines reflect the decline in international prices that took place over the same period. It is indicative that the international price of unleaded was 765 dollars per ton at the beginning of the year, reached 1470 dollars in June and fell to 850 dollars in early December.

A high-ranking executive of a large fuel trading company told APE-MPE that despite the drop in prices, gasoline sales remain significantly lower than both last year and 2019, which was the last year of “normality” before the pandemic. “In November consumption was 12% lower than in 2019 and 6% lower than last year,” it said. He believes that the decline indicates a rather permanent change in consumer behavior. “Greek drivers use the car less, have found substitutes and now have the price as the main criterion for choosing a gas station. On the contrary, there is no reduction in demand for diesel used by professionals despite the end of the price subsidy. And in heating there is a significant increase in sales.”

The price of heating oil, it is recalled, is subsidized by the budget with a reduction of the Excise Tax and VAT by 25 cents per liter, but also by refineries and oil trading companies.

Prices on the Electricity Exchange are on a different trajectory as after a period of decline (August: 436.53 euros per megawatt hour, September: 416.87 euros per megawatt hour, October: 232.6 per megawatt hour, November: 227.75 per megawatt hour, in December they follow an upward trend and were formed during the first fortnight of December at 318.37 euros per megawatt hour.As is known, the prices of the Stock Exchange do not directly affect consumers as with the mechanism applied since the summer, retail prices are announced until 20 each month and apply to the next while government subsidies which are also announced monthly “land” consumer prices to the level of 15-17 cents per kilowatt hour.On current data, the reference prices to be announced by suppliers on December 20 for January will be relatively increased and state subsidies will be shaped accordingly.

RES-EMP

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