The evolution of the Greek transport fuels market, 2009-2014

In our country, the petroleum products market is an important parameter that affects both the development of the domestic energy sector and the national economy. For several years, petroleum products have had the main share in gross domestic energy consumption. Up to 2010, the consumption of petroleum products was more than 50% of the total consumption of the country. Due to the economic recession and other factors, the participation of petroleum decreased after 2008 (Figure 4.1.1).

Figure 4.1.1: Share of petroleum products in gross domestic energy consumption


Source of primary data: Eurostat.

Our country shows high dependence on imports of energy products, mainly oil and petroleum products. According to Eurostat data for 2012, approximately 67% of the gross energy consumption of the country comes from imports, while the corresponding average figure for the EU28 is less than 54%. As a result, Greece’s energy dependency on oil imports is an essential factor for the security of the Greek energy sector. Additionally, the changes of the international crude oil prices have a direct impact on the domestic energy market and the national economy. Petroleum products imports in the country are high, but it is also encouraging that in recent years exports have also increased (Figure 4.2.1 (a) and (b)).

Figure 4.1.2: Oil and petroleum products balance of trade


Source of primary data: Eurostat.

In general, the petroleum market and, more specifically, the crude oil refining sector is a major economic and extrovert field of the Greek economy. The share of the refining petroleum sector in national GDP is substantial and higher than the average of the 27 EU countries (Figure 4.1.3). Also, the employment of the sector has increased in recent years covering about 0.15% of total employment (Figure 4.1.4), about the same level as the EU average. Greece has great crude oil refining capacity as 2 companies with 4 refineries of 26.4 million tones total annual nominal capacity, are operating in the sector.

Figure 4.1.3: Share of the refining petroleum sector in national GDP (in current prices)


Source of primary data: Eurostat.

However, Greece is a small market and acts as a price receiver from the international market. Consequently, any changes in international crude oil prices have direct positive or negative impacts on the domestic market. The following sections present the evolution of the domestic fuel prices and consumption, as well as international oil prices, trying to identify any interactions between the domestic and international markets.

Evolution of the fuel prices in Greece for the period 2009-2014

It is interesting to examine the evolution of the domestic fuel prices during the last six years. Figure 4.1.5 (a), (b), (c) and (d) present the annual average prices and the range of the prices for unleaded petrol and diesel, both as final consumer prices (pump prices) and prices before taxes and other charges. From the first two diagrams related to unleaded petrol, it is clear that there is an important difference between the pre-tax and the final prices. There is also a strong increase in the prices of unleaded petrol before taxes, during the period 2009-2012, followed by a decrease in the prices for the next years (Figure 4.1.5 (a)). These changes are directly related to the trends of crude oil’s international prices. Respectively, the final prices of unleaded petrol (Figure 4.1.5 (b)) follow an upward trend until 2012 but their decrease afterwards is smoother. This is probably related to the level of charges on the product, as is discussed in more detail below. Regarding diesel, we observe similar trends in prices before taxes, because of the international prices, but a stronger decrease too in final prices after 2012, due to lower charges compared to unleaded petrol.

Figure 4.1.5: Evolution of transport fuels prices in Greece, 2009-2014 (in euro/1000 liters)



Source: European Commission, Energy, Market observatory & Statistics, Oil bulletin (

Evolution of the prices in 2014

As is well known, recently, the international price of oil had a significant decrease that also affected the domestic fuel prices. Therefore, it is very interesting to examine the trend of prices throughout this year. Figure 4.1.6 (a) and (b) show the average monthly prices before taxes, as well as the final consumer prices. We can notice the great decrease in the pre-tax prices after September 2014, while the decrease in final prices was not so strong. This is due to the constant taxation and other charges that represent a significant proportion of the final price. We can also note that even if the price of unleaded petrol before taxes is lower than the price of diesel, the final prices are opposite, because of the lower tax rates on diesel. However, the above remarks are just an illustration of the price trends. In order to draw safe conclusions about the impact of the international price changes in the domestic market, a more detailed analysis is required.

Figure 4.1.6: Evolution of transport fuels prices, 2014 (in Euro/1000 litres)


Source: European Commission, Energy, Market observatory & Statistics, Oil bulletin (

Evolution of the international oil prices

As mentioned, a key factor that affects the domestic fuel prices is the level of the international crude oil prices. Figure 4.1.7 shows the trends of the average monthly international prices for 2009-2014. The diagram shows the significant decrease in the international prices over the last five months of 2014. Recently, the prices reached the level of 2009 prices. Therefore, the decrease in the international prices affects directly the domestic fuel prices, but as expected, the decrease of the final domestic price is lower, because of the remaining lump sum charges, as defined in the next section.

Figure 4.1.7: Average monthly international crude oil price evolution


Source: U.S. Energy Information Administration (

Charges and Fuel Taxes

Another factor that affects the level of the final price of fuels in our country is taxation. Apart from the VAT, the main charge for the consumer is the Excise Duty. Table 4.1.1 presents the evolution in the Excise Duty for unleaded petrol and diesel from 2009 until today. We notice the significant increase of the Excise Duty for unleaded petrol from 359 to 670 €/1000 liters. This change had great influence on the evolution of the final prices but, additionally, reduced the positive effect from the decrease of the international oil prices. Moreover, in Figures 4.1.4 (a) and (b) it is obvious that there is great difference between the pre-tax and the final prices. In contrast, the Excise Duty for diesel is lower and has decreased after 2012. Thus, there is less difference between the pre-tax and the final prices, while, as already mentioned, the effect of the international crude oil price changes is stronger and more visible.

Table 4.1.1: Excise Duty of fuels in euro/1000 litrles

Period Unleaded Diesel Legal Framework
From 1/2009 to 7/2009 359 302 L.3483/2006
From7/2009 to2/2010 410 302 L.3483/2006 & L.3775/2009
From2/2010 to3/2010 530 352 L.3828/2010
From3/2010 to5/2010 610 382 L.3833/2010
From5/2010 to11/2012 670 412 L.3845/2010
From11/2012 670 330 L.3845/2010 & L.4092/2012

Transport fuels consumption in Greece

Figure 4.1.8 presents the monthly trends of the domestic fuels consumption for the period 2009-2014 (for 2014 only the available provisional figures are presented). The main remarks for the consumption are presented below. Traditionally in Greece the consumption of unleaded petrol was higher than diesel consumption, but lately this tends to equate. The fuel consumption during the summer months is increased. During the last six years, the use of petrol decreased, while diesel use remained relatively stable. It seems that the economic crisis, coupled with the increase in international prices of crude oil until 2013, as well as the increased taxation of unleaded petrol, has resulted in significant reduction in petrol consumption. However, the lack of data for the consumption during the last months of 2014 does not allow us to exclude conclusions regarding the impact of the recent drop in international prices on domestic consumption.

Figure 4.1.8: Transport fuels consumption (in tones)



The Greek energy sector is characterized by a high share of petroleum products in domestic consumption, while, at the same time, shows high energy dependency from imported oil. As a result, our country acts as receiver of international crude oil prices allowing their changes to have a direct impact on the domestic market. However, it seems that the fuel prices in Greece are also affected by the high taxation rates. The increase in Excise Duty for unleaded petrol in recent years, coupled with the burden of VAT, as well as the effects of the economic crisis in the country, has resulted in a negative impact on consumption. At the same time, the high share of taxes in the final price acts as a brake to the downward trend of prices, due to the recent reduction of the international prices.

On the contrary, the Excise Duty for diesel seems to have smaller impact on both the final prices and the consumption. Additionally, the effect of the international price changes is more direct on consumer prices. Moreover, due to the difference in the Excise Duty between unleaded petrol and diesel, it is observed that even if the pre-tax price of unleaded is lower than that of diesel, final prices react in the opposite way. Finally, even if, traditionally in Greece, the consumption of unleaded petrol is greater than the consumption of diesel, lately, due to the factors mentioned before, the consumption of the two types of fuel has been equated.

In any case, this work is only an introductory part of ongoing research and the conclusions presented here are only primary estimations based on the observation of the price trends. It should be noted that in order to extract accurate and safe conclusions about the impact of the changes of the international prices on the domestic market, a more thorough analysis is required.

*  by Vassilis Lychnaras

Source: Greek Economic Outlook, issue 26, pp. 35-39, Centre of Planning and Economic Research (KEPE), February 2014.