Heating fuel sales down 40%, auto fuel demand dips 2%

Heating fuel sales in Greece over the three-month period covering October to December fell by approximately 40 percent against the level registered for the equivalent period a year earlier.

A spike in heating fuel sales during December, reflected by the thousands of heating fuel subsidy applications submitted, proved insufficient to make up for the subdued orders of October and November, kept low as a result of the milder weather experienced during these two months.

Market officials do not expect any improvement in these subdued heating fuel sale figures over the coming months.

A special consumption tax increase imposed on heating fuel in October, combined with higher fuel prices ranging between 10 and 15 percent, have greatly contributed to the lower sales.

Market officials also expect a downward sales trajectory in auto fuels. Sales in this fuel category slipped by 2 percent in December compared to a year earlier.

The data coming through strongly indicates that the government chose to increase fuel taxes at a highly inappropriate time - amid rising international fuel prices.

The special consumption tax hike for auto fuels, which took effect on January 1, has increased auto fuel prices by between 4 and 5 cents per liter around most parts of the country, including VAT. Gasoline prices have risen to levels ranging between 1.49 and 1.54 euros per liter, diesel has shot up around 12 cents from 1.18 euros per liter to 1.30 euros per liter, while auto gas has risen by 10 cents per liter, from 72 cents to 82 cents.

Fuel price increases have been even steeper on islands – Cyclades and Dodecanese - which, besides the special consumption tax increase, have also been hit by a hefty VAT increase, from 17 percent to 24 percent. Gasoline prices in these regions now range from 1.66 euros per liter to 1.91 euros per liter. Diesel is selling for prices of between 1.30 euros per liter and 1.53 euros per liter. Heating fuel prices range between 1.04 euros per liter and 1.15 euros per liter.

The government is attributing the fuel price increses to the higher international fuel prices.

Total taxes included in auto fuel prices in Greece represent 72 percent of retail prices, compared to the EU average of 66 percent. Besides the higher fuel prices in Greece, consumers are also confronted by lower disposable incomes.

Critics have condemned the government for placing at risk its economic growth target of 2.7 percent for 2017 as a result of overtaxation aiming at surplus figures.