Local taxpayers rank among Europe’s top four in terms of a special consumption tax imposed on auto fuel, burdened by a 0.679 euro charge for every litre of unleaded petrol. The tax burden is made even heavier by the addition of a 23 percent Value Added Tax, a rate that is considerably higher than VAT levels imposed in most developed EU member states.
As a result, unleaded auto fuel, sold for 0.341 euro per litre by refineries, is currently selling for an average of about 1.35 euros per litre at the pump. Taxes constitute 66.7 percent of the retail price, or 0.90 euros per litre. This is the main reason why plunging crude oil retail prices are having a limited effect on retail prices.
Taxpayers in Greece are burdened by higher special consumption tax and VAT rates than other European countries with far greater GDP per capita levels, such as Germany, France, Belgium, Luxembourg, Austria, and Cyprus.
Tax imposed on fuel in Greece is 30 percent higher than the EU-28 average of 0.52 euros per litre. Subsequently, according to official European Commission data for January 12, Greece’s average retail price for unleaded auto fuel of 1.398 euros per litre is 7.3 percent higher than the EU-28 average and 5.82 percent higher than the 19-member eurozone average.
Besides being overtaxed, auto fuel in Greece is also overpriced by middlemen in wholesale trading activities. According to European Commission figures, the average selling price by refineries for unleaded fuel in the EU-28 and eurozone, prior to any taxation, is 0.447 euros and 0.453 euros, respectively. In Greece, the figure stands at 0.457 euros per litre.
Local fuel market middlemen generally attribute Greece’s higher pre-tax fuel cost to higher transportation costs as a result of the country’s geographical nature, or many islands, as well as the lack of fuel storage facilities on islands, which adds to transportation costs.