Demand for super unleaded gasoline rises 34.8% during lockdown

Overall petroleum product demand fell by 8.1 percent in 2020 compared to the previous year, from 7.29 million tons to 6.69 million tons, suppressed by lockdown measures, but, in a surprise result, demand for super unleaded gasoline (98/100 octane) increased by 34.8 percent, to 331,664 liters from 246,044 liters in 2019, a development attributed to an extensive upgrade of car models in Greece over the past five years and an increasing trust shown by drivers in higher-octane gasoline.

Demand for regular unleaded gasoline fell by 23 percent, from just over 2 million tons in 2019 to 1.57 million tons in 2020, according to Hellenic Statistical Authority (ELSTAT) figures.

Auto diesel demand declined by 6.5 percent, from 2.73 million tons in 2019 to 2.55 million tons in 2020.

Demand for high-sulfur fuel, used in the shipping sector, fell sharply by 28.7 percent, over the same period, the ELSTAT data showed.

Heating fuel demand also rose in 2020, registering a 15.2 percent increase, to 1.25 million tons from 1.08 million tons in 2019. This demand increase was attributed to lower prices.

 

 

Gasoline sales down 40% this month, poor year for fuel sector

The liquid fuel market has been the hardest hit energy sub-sector in 2020, as highlighted by poor sales figures for December, by far the worst month of this year’s pandemic-affected sector results.

Gasoline sales are expected to end December 40 percent lower compared to the equivalent month a year earlier, car diesel sales are forecast to drop 15 percent, while heating fuel demand has slumped by 50 percent this month compared to this time a year earlier.

Overall, liquid fuel sales are projected to end 40 percent lower in December and 6 percent for the year.

Heating fuel demand for the year is projected to end up 20 percent, a development attributed to considerable purchases made last April by households, who made the most of lower prices.

Though Greece’s current lockdown has permitted motorists to circulate within their regions until an evening curfew, the forbiddance of longer-distance movement, from province to province, has been a major setback for auto fuel sales.

In addition, the pandemic-induced slump of the tourism sector, a major source of revenue for Greece’s fuel market, has also impacted fuel sales.

Looking ahead, petroleum firm projections for the first quarter of 2021 are not optimistic. Sector players believe lockdown restrictions will continue to be enforced.

A recent 7 percent tax increase on auto fuel, to support green energy, is another setback for the liquid fuel market. Prices, at the pump, will rise by 3 cents per liter.

 

Lockdown relaxation limits fuel sales drop, tourism pivotal

Petroleum product traders have experienced a slight improvement in sales figures since the relaxation of lockdown measures at the beginining of May.

During this 13-day period, the fuel sales drop has been contained to 30 percent compared to regular levels, far better than a slump that reached as low as 60 percent in April.

The pandemic’s impact on diesel has been milder. Sales for this fuel are now down 10 percent after dropping 30 percent in April.

Market officials attributed this increase to the first-stage relaxation of lockdown measures. Also, the general public has remained apprehensive about using public transport, prompting a further rise in the use of private vehicles.

Heating fuel sales were up over the past few weeks compared to  an equivalent period last year as consumers took advantage of a massive drop in oil prices to stock up for next winter.

A new extension granted by the government for heating fuel supply until the end of the month is not expected to make an impact on sales figures. Most consumers have already stocked up and heating fuel prices are now gradually rising.

The pandemic’s development, impact on wider activities and, most crucially, tourism this summer will be instrumental for the future course of fuel sales figures. Current levels are expected to remain unchanged over the next two to three months.

A finance ministry relief measure for payments of special consumption tax and VAT on fuel purchased between May 4 and 19 has not been a great help for market liquidity, officials pointed out.

Fuel demand dives, heating fuel sales supported by low prices

Fuel consumption, down to unprecedented levels as a result of the lockdown, has produced a nationwide gasoline sales drop of 70 percent this month. The slide in gasoline sales has been even steeper in urban centers, falling by as much as 80 percent.

The reduction in demand for diesel has been milder, limited to levels of far less than 50 percent as a result of ongoing agricultural activities around Greece.

On the contrary, heating fuel demand has stood firm against the wider downward trend, supported by extremely attractive prices that have encouraged consumers to stock up as early as now for next winter.

Heating fuel prices have registered a 24 percent drop since the beginning of the year, falling to 0.815 euros per liter from 1.07 euros per liter.

The heating fuel price reduction in Greece is far smaller than that of international oil prices because a considerable percentage of the local retail price is comprised of taxes.

The heating fuel season ends at the end of April, meaning consumers have about two more weeks to place orders at the current prices.

An OPEC agreement reached last week for a 10 percent reduction in output considerably increases the likelihood of a price rebound. The production cutback puts an end to the Saudi-Russian price war.

Domestic fuel market battered, first-half losses projected

Petroleum product traders, overwhelmed by the dramatic drop in fuel sales as a result of restrictive measures prompted by the coronavirus crisis, are making grim forecasts for financial results in 2020.

Losses are projected for the first half while, overall, 2020 will be a bad year, fuel company officials are already admitting.

Fuel demand is seen falling by 40 percent during the final week of March and throughout April, company officials have told energypress.

So far this month, gasoline sales have dropped 20 percent, demand for diesel fuel is down 8 percent, while, on the contrary, heating fuel demand has risen by 22 percent as a result of the ongoing chilly weather combined with the crisis’ enforced domestic living.

Market officials expect fuel sale figures to slip further in the two-month period covering April and May. They have forecast a 50 percent drop.

“It is getting worse by the day for auto fuel sales,” one market official stressed.

Even so, the year’s financial concerns for petroleum firms can still be reversed if restrictive measures are not extended beyond May, some officials believe.

The upcoming summer tourism season will be one of the worst on record, petroleum company officials have forecast, noting that even if the coronavirus outbreak is brought under control in Greece, predictions cannot be made for other countries. The tourism potential for June has already been written off, the sources added.

Bioethanol, Iran tension lift gasoline prices by four cents per liter

Motorists, in recent days, have faced the prospect of gasoline price hikes of as much as three to four cents per liter, compared to December 31 levels, escalating tension in the Middle East following the assassination of Iranian military commander Qasem Soleimani in a US drone attack ordered by President Donald Trump and the event’s impact on the international oil market being a key factor.

Another – less publicized and possibly more important – factor also leading to fuel price rises concerns an EU law requiring greater use of bioethanol, produced from a renewable source. Over the past year, a new EU law for cleaner energy has obligated refineries to include biofuels in their fuel mix.

As a result, the percentage of bioethanol included in conventional gasoline mixes has increased as of January 1, increasing gasoline production costs.

Subsequently, the price of gasoline at local refineries has risen from 1,173.59 euros per cubic meter on December 31 to 1,198.59 euros in prices registered January 1 and 2. This represents an overnight price increase of 25 euros per cubic meter or 2.5 cents per liter. The price rise will begin taking effect at petrol stations today, the end of the extended festive season in Greece.

The rising concerns in the Middle East combined with the cleaner auto fuel initiative will result in a retail price increase of approximately four cents per liter.

Worse still, a retaliatory attack by Iran on Saudi facilities, or an effort by Tehran to block the Strait of Hormuz, a corridor through which 20 percent of global oil is transported, would prompt far sharper price hikes. The latter scenario would lift oil prices to over 150 dollars a barrel, according to a report by research company Capital Economics.

 

 

Households, businesses, inflation impacted by OPEC-sparked fuel hikes

Sharp price increases of auto and heating fuel, as well as natural gas, are impacting household and business costs as well as the inflation rate, data released by ELSTAT, the Greek statistical authority, has shown.

The price of natural gas registered a 13.1 percent price increase compared to November last year, diesel was up 11.3 percent, and heating fuel rose 14.7 percent, the ELSTAT data showed. On the contrary, the price of gasoline fell by 3.8 percent compared to the equivalent month a year earlier.

The price shifts have been attributed to international crude and petroleum product prices, shaping prices set by refineries and traders.

Subsequently, transportation and operating costs for businesses, determined, to a large extent, by fuel price levels, have risen considerably.

Further fuel price rises are expected as a result of a decision by OPEC members and other oil-producing countries to reduce output by 1.2 million barrels per day.

The price of Brent Crude Oil rose to more than 63 dollars per barrel following the announcement of the cutback by oil producers last Friday before correcting to less than 60 dollars in the days that followed.

 

Fuel sales down 2.8% in Greece for 9-month period

Gasoline, diesel and heating fuel sales – in volume terms – are continuing to fall as highlighted by a 2.8 percent decline for the nine-month period compared to the equivalent period last year, official energy ministry data has shown.

Paradoxically, this overall fuel sales drop in Greece coincides with record-breaking tourism industry figures. Locals have cut back on holiday-related domestic travel while many visitors from abroad are opting not to use vehicles during their stays, pundits noted. The increasing trend of all-inclusive travel packages offered by hotels is also believed to have affected domestic fuel sale figures.

Heating fuel registered the biggest drop, falling 23.7 percent during this year’s nine-month period compared to a year ago. Gasoline sales dropped 1.8 percent during the same nine-month period, while auto diesel fuel volume-based sales buckled the trend to rise by 3.5 percent.

September’s overall volume-based fuel sales figure was also down, falling by 3.6 percent compared to the equivalent month last year.

Gasoline sales registered a sharp 5.5 percent drop in September compared to the same month a year ago. The diesel fuel sales drop was milder, slipping 1.7 percent this September.

Confusion abounds over fuel price-limiting surcharge

In the heart of summer, the cost of unleaded fuel at petrol stations on the Greek islands reached the 2-euro per liter level, prompting RAE, the Regulatory Authority for Energy, to propose the implementation of a price ceiling in 17 regions. However, the Economy and Development Minister Yiannis Dragasakis tabled a counterproposal entailing the adoption of a subsidies measure to offset fuel transportation costs as the most effective way of tackling the issue.

Now, several weeks later, unleaded fuel prices on islands have risen again to levels just below 2 euros per liter. Meanwhile, government officials do not appear to know what this subsidies measure will end up costing, how many liters of island-bound fuel it will be valid for, and if funds exist to finance it.

Financing such a measure should not be an issue for the government. Petrol station companies contribute 1.2 percent of the price of each liter of fuel to the national budget, SEEPE, the Hellenic Petroleum Marketing Companies Association, has reminded in seven letters forwarded to six different ministers over the past three and a half years.

Mid-way through 2015, the government abolished a special account taking in these payments but petrol stations have needed to keep paying their 1.2 percent contributions over the past three and a half years. It has remained unclear where this money is ending up, how it is being utilized and by whom. Yet, the 1.2 percent surcharge on fuel remains attached to the retail sums paid by consumers. The surcharge was introduced with the purpose of restricting fuel prices on islands.

SEEPE, in its series of letters addressed to ministers holding ecomomy, energy and finance portfolios, has demanded to be informed on how this pool of funds is being used but has yet to receive any response.

Roughly 6 million tons of fuel is transported each year, meaning that funds raised through the surcharge amount to between 45 and 50 million euros per year.

 

 

 

 

Ministry unsure about RAE’s fuel price ceiling proposal

The Ministry of Economy and Development appears to be unsure as to whether it should adopt a proposal forwarded by RAE, Greece’s Regulatory Authority for Energy, calling for the imposition of price ceilings on unleaded fuel in 17 regions around Greece where it has been found that at least 70 percent of petrol stations are selling the fuel at excessive price levels.

According to an official at the ministry’s General Secretariat of Trade and Consumer Protection, RAE’s price-ceiling proposal is currently being examined but the implementation of measures remains uncertain. Decisions are expected within the next ten days, ministry officials informed.

Meanwhile, fuel traders and retailers are pushing for a meeting with government officials to discuss market problems caused by a value added tax hike on fuel on the islands as well as the end of fuel subsidies in certain parts of Greece.

Ministry officials are believed to be considering reinstating fuel transportation subsidies, with conditions attached, rather than imposing price ceilings. The return of transportation subsidies could offer longer-term benefits, the officials believe.

Fuel price ceilings proposed for 17 regions, mostly islands

RAE, Greece’s Regulatory Authority for Energy, has proposed price ceilings for unleaded 95 octane fuel in 17 regions around the country where it has been found that at least 70 percent of petrol stations are selling fuel at excessive price levels.

Formulae factoring in related data have been applied by the authority to determine and set price ceilings for the 17 areas, most of which are islands. RAE’s proposal has been forwarded to the Ministry of Economy and Development and the Ministry of Finance.

The RAE study proposes price ceilings for Grevena, Evritania, Kefallonia, Fokida, Rethymnos, Corfu, Lefkada, Kilkis, Zakynthos, Thesprotia, Samos, the Cyclades, Chios, the Dodecanese, Arcadia, Rodopi and Kastoria. Price ceilings per liter of unleaded fuel have been calculated for each of these areas.

According to the proposal, these fuel price ceilings should remain valid until September 30 and be revised weekly.

RAE did not find any pricing irregularities in the refining and wholesale sectors.

RAE expected to reach decision today on fuel price ceilings

RAE, Greece’s Regulatory Authority for Energy, is examining data provided by the General Secretariat for Commerce to decide if price ceilings will need to be imposed on liquid fuels in order to protect consumers from extraordinarily high price levels observed around the country this summer, especially on islands.

Over the past three days, RAE officials have been examining the details of a 30-page study focused on over-inflated fuel prices to decide if current price levels, which in some cases have exceeded two euros per liter for unleaded gasoline, are justified.

Transportation costs, wholesale and retail fuel market profit margins, fuel price comparisons around the country, fuel tax levels, as well as other factors influencing price levels, both domestically and internationally, are all being examined at RAE.

The authority is seen reaching a decision on the matter today, which is then expected to be forwarded to the Ministry of Economy and Development as a policy proposal, energypress sources informed.

According to unconfirmed reports, extraordinary price-control measures, most probably in the form of fuel price ceilings, will be imposed on certain island markets.

If introduced, these fuel price ceilings will be valid for an initial two-month period and then be revised weekly, sources noted.

RAE to propose fuel price limit, prices up on the islands

RAE, Greece’s Regulatory Authority for Energy, is examining the prospect of proposing a price ceiling on liquid fuels in various regions around the country where price levels of unleaded gasoline and other petroleum products have risen to extraordinarily high levels.

The authority’s board is expected to meet either today or tomorrow to decide on whether to forward a substantiated price-ceiling proposal to the Ministry of Economy and Development, energypress sources informed.

RAE officials have been examining price-related fuel data gathered over the past couple of months to determine whether retail prices, up to levels of approximately two euros per liter for unleaded fuel, and in some cases even higher, are justified.

Citing one extreme example, a local fuel price monitoring agency has pointed out that unleaded fuel is selling for as much as 2.045 euros per liter on the island Sikinos.

RAE was prompted to take action as a decline of the country’s average price for unleaded fuel between June and July, from 1.654 euros per liter to 1.634 euros per liter, was not reflected in many areas around the country, including islands.

On the Cyclades, unleaded fuel prices currently range between 1.95 and 1.99 euros per liter on Milos, Amorgos, Anafi, Andros, Naxos, Sifnos, Serifos and Santorini.

On Skopelos, Alonissos and Patmos, prices have ranged between 1.997 and 1,999 euros per liter. Price levels of as high as 1.99 euros per liter have been recorded in Ikaria.

Market officials have attributed the elevated fuel prices on islands to the small number of suppliers and the disproportionately large number of petrol stations given the small size of islands. As a result, petrol station owners are seeking to rake in profits during the summer season’s higher demand and secure  sustainability as business activity during the rest of the year is minimal at best.

High fuel tax levels and transportation costs have also contributed to the elevated prices on islands.

 

Local refineries post subdued 1Q results, higher fuel prices now dropping

The current year did not begin favorably for the local petroleum sector, as indicated by first-quarter results posted by of the country’s two biggest refineries controlling the Greek fuel market.

Drastically reduced heating fuel sales were the main factor behind the disappointing first quarter results, compared to last year, despite an increase in demand for diesel and a modest rise in gasoline sales following an extended downward trajectory.

ELPE (Hellenic Petroleum), which announced its first-quarter results yesterday, reported a 13 percent fuel sales decline, overall, down to a level of 826,000 metric tons, despite operating a greater number of refueling stations, up to 1,749 in the first quarter from 1,737 a year earlier.

ELPE’s heating fuel sales fell by 22 percent in the first quarter, year on year, while diesel and gasoline sales rose by 6 and 2 percent, respectively.

The increased first-quarter sale figures for auto fuels, offering wider profit margins, helped the group’s EBITDA/metric ton margin improve slightly, by one percentage point.

Motor Oil Hellas, the Greek fuel market’s other major player, reported a 6.2 percent overall decline in auto and heating fuel sales.

Auto fuel sales at the group rose by 3.8 percent in the first quarter. Gasoline sales were up by over one percent while demand for diesel increased by 5.8 percent. However, the significant drop in heating fuel sales drove the group’s overall results lower.

Higher fuel prices in the first quarter have been attributed as a factor affecting sale levels in the sector. Prices at local pumps have just begun dropping as lower international prices begin to impact the Greek retail fuel market.

 

Just 1.1% of fuel smuggling fines revenue forecast collected

Proceeds injected into the Greek State’s coffers from penalties imposed for illicit fuel trade amounted to 11.2 million euros between 2015 and 2017, representing just 1.1 percent of a one-billion sum previously pledged by the current government.

The disappointing data, which highlights the anemic effort, at best, being made by local authorities to combat a gigantic problem depriving the Greek State of billions in state revenues, was recently presented in parliament following a question raised by main opposition New Democracy party MP Hristos Staikouras.

In 2013, state revenues stemming from penalties imposed for fuel trade violations reached 15.5 million euros before sliding to 11.4 million euros in 2014, 4.4 million euros in 2015, 3.7 million euros in 2016, and 3.1 million euros in the first nine-month period of 2017.

Fuel smugglers have taken full advantage of this extended period of slackened monitoring to increase their level of illicit trading activity by discovering new market niches, including in the auto LNG market, and fine-tuning their ways.

A much-heralded cash inflow-outflow monitoring system installed at all petrol stations since 2014 and estimated to have cost 100 million euros has proven futile as its resulting data, imported into the finance ministry’s information system, is not being utilized.

Little progress is believed to have been made in implementing another monitoring system requiring fuel trucks and the country’s thirty or so tankers to be installed wth GPS systems. Legislation for this measure was ratified in 2012. It was followed by a ministerial decision, signed by several ministers last August, which set an October 31, 2017 deadline for the installation of GPS systems by all fuel trucks and vessels. The number of trucks and vessels that have complied with the measure remains unclear.

Just days ago, a joint ministerial decision signed by energy minister Giorgos Stathakis and deputy finance minister Giorgos Houliarakis, reinstated bonus payments for officials at KEDAK, a fuel handling and storage controls authority. These bonuses were scrapped in early 2016 as part of the wider bailout-related cuts. The initiative to bring them back suggests that inspections for illicit fuel trade can be expected only when authorities are offered bonus fees. Whether this bonus-fees initiave can produce results, depite the lax enforcement of all the aforementioned measures, remains to be seen.

 

Poor December figures dampen fuel sector’s overall 2017 performance

Subdued fuel demand figures registered in December, including sale level drops  for certain categories, impacted the sector’s overall performance for 2017, which ended slightly down compared to the previous year.

More specifically, in December, gasoline demand fell by a level of between 2 and 3 percent compared to the equivalent month a year earlier. Heating fuel demand fell sharply by 30 percent compared to December, 2016, primarily as a result of the milder winter experienced so far, combined with a preceding reinforcement of reserves. Also, emerging as the most surprising result of all, auto diesel demand fell by a considerable 10 percent.

Subsequently, the overall drop in sales for 2017 is estimated to be between 1 and 2 percent, primarily as a result of the steep drop in heating fuel sales.

These end-of-year results effectively mean that the fuel sector failed to register a solid rebound for yet another year.

Officials are concerned that a tax hike planned for diesel will further impact the sector.

 

Major fuel players growing amid intensifying competition

Despite showing signs of a rebound in the first two months of the year, the gasoline market has struck negative territory, a development that is intensifying competition and prompting traders to revise their strategies.

Approximately 23.5 percent of the Greek market’s petrol stations have gone out of business during the country’s prolonged recession, now into its seventh year. In this time, the number of outlets has been reduced to less than 6,500, from roughly 8,500.

Amid this cut-throat environment, bigger players, especially those directly controlled by the ELPE and Motor Oil Hellas refineries, are increasing their market shares and adding new outlets to their chains in an effort to maintain sales at high levels.

Enterprises that control approximately 50 percent of the retail fuel market have managed to make further gains.

Following up on its takeover of Cyclon, a move that boosted its retail network by roughly 200 petrol stations, the Motor Oil Hellas group recently also acquired the Revoil storage facilities in Kavala to acquire an additional base in northern Greece. Over the past few years, Motor Oil Hellas has moved to increase its retail network, especially those operated by Coral and Avin, the refinery’s two main retail subsidiaries.

ELPE (Hellenic Petroleum), which controls Greece’s EKO and BP retail networks, the market leader and follower, respectively, is taking similar action. The leadership at the refinery’s sales division recently noted the group plans to bolster its presence in areas of high tourism growth.

Besides increasing their retail networks, the two refineries are also employing other means to increase fuel sales. As part of its partnership with the supermarket chain Alfa-Vita Vassilopoulos (AB), Coral, another retail arm controlled by Motor Oil, has increased its number of petrol stations combining mini markets.

Further market changes are expected following Jetoil’s bankruptcy last year. Russia’s Centracore has expressed an interest to acquire the company’s storage facilities in Thessaloniki. Motor Oil Hellas and ELPE are also eyeing these facilities as a springboard for further growth in northern Greece and neighboring Balkan countries.

EKO is the retail fuel market leader with a 14.50 percent share. It is followed by BP (12.7%), Shell (11.7%), Elinoil (9%), Revoil (8.6%), Aegean (8.1%). Avin (7.5%), Eteka (3.9%), Silk Oil (3.7%) and Cyclon (3.2%).

Gasoline demand drop of 4.6% dampens economic outlook

Gasoline demand fell by 4.6 percent in the first quarter of 2017, compared to the equivalent period a year earlier, official market data released by the energy ministry has shown.

The downward trajectory of market trends, especially in fuel demand, a key economic indicator, runs contrary to more optimistic forecasts trumpeted by the government, claiming the country is now set for an economic recovery.

Diesel (ULSD) demand registered a marginal 0.6 percent increase in the first quarter and auto LPG demand rose by 2.9 percent.

Howewer, in March, gasoline demand dropped by 1.4 percent, LPG sales slumped by 7 percent and heating fuel – in a seasonal development – plunged by 25.4 percent.

Market officials expect a further overall slump in fuel demand to be registered for April. Unofficial data suggests a double-digit drop in diesel sales, but refineries have not confirmed such a development.

Diesel demand fell by 6.1 pecent and 2.2 percent in January and February, respectively, before rising sharply, by 8.5 percent, in March. Diesel is the leading fuel of choice among drivers in Greece.

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.

 

 

Roughly 15% of petrol stations cheating drivers, study shows

Roughly fifteen percent of petrol stations are undersupplying customers at the pump compared to four percent four years ago, according to research conducted by the National Technical University (NTUA).

The study, whose results were published today, showed that the cheating practices are primarily being performed by petrol stations offering lower prices.

The results are based on a sample of 150 petrol stations operating in the wider Athens area, which were checked between August 22 and October 3.

The study’s director, Fanis Zanikos, noted that 85.5 percent of samples passed the test while the remainder failed.

Discrepancies are being detected through an “inflow-outflow” monitoring system installed at most petrol stations but still not yet fully operational despite certain steps taken in more recent times, it was pointed out during a presentation of the survey’s results.

Yiannis Aligizakis, president of SEEPE, the Hellenic Petroleum Marketing Companies Association, noted that the “inflow-outflow” monitoring system has been installed at 99 percent of petrol stations for a total cost of 90 million euros, while adding that processing and utilization of data is not being carried out. System software had yet to be certified, the SEEPE chief also noted.

Commenting on illicit fuel trade, Aligizakis said resulting annual tax losses for the state amounted to between 250 and 300 million euros per year.

SEEPE officials called for the government to reexamine upcoming fuel tax hikes, noting that tax revenue targets will not be achieved as a result of the negative impact by the taxes on consumption levels. The association also requested more inspections at petrol stations.

IOBE report: Fuel taxes to hit growth, spark illicit trade

New fuel tax increases set to be introduced, beginning with heating fuel as of October 15, will severely undermine the Greek economy’s growth potential as well as tax revenues, according to IOBE, the Foundation for Economic and Industrial Research, in a study officially released today.

The tax revenue shortage will be caused by a further dampening of market demand as a result of the fuel tax hikes, the IOBE study notes. Besides heating fuel, tax increases on gasoline, diesel and LNG will follow as of January 1.

The government hopes this latest round of fuel tax hikes can rake in a further 400 million euros by the end of 2017.

The fuel tax hikes are made harsher by the current rebound seen in international crude oil prices, which have risen from 46 dollars to 51 dollars a barrel over the past couple of weeks, prompted by a late-September OPEC agreement for a freeze of daily output levels as of  November.

Assuming no major price fluctuations take place over the next few days in crude oil and the euro-dollar exchange rate, heating oil is expected to hit the Greek market at 92 cents per liter, up 8 percent from last year’s level of 84 to 85 cents per liter registered during the equivalent period.

This heating fuel price rise is the result of a higher special consumption tax (EFK) rate, from 23 cents to 28 cents per liter, a VAT increase on fuel from 23 percent to 24 percent, as well as refinery price increases.

Concerns over the financial standing of Deutsche Bank are applying pressure on the euro currency against the dollar.

Besides the IOBE study, Eurostat and Greek finance ministry figures also highlight the negative impact of fuel tax hikes on demand levels. Since 2009, when fuel tax hikes began rising in recession-struck Greece, fuel demand has fallen by at least 39 percent, severely affecting tax revenues.

The IOBE study also warns that illicit fuel trade will be encouraged as a result of the tax hike and inability by officials to fully enforce an “inflow-outflow” data monitoring system that would enable the Finance Ministry to track purchases and sales in the sector.

Fuel prices set to increase as of June 1 following tax hike

Fuel prices in the Greek market are set to rise as of June 1 following a recent government decision to increase the special consumption tax (EFK) imposed on fuel.

The tax on unleaded fuel will be increased to 700 euros from 670 euros per 1,000 liters. This will result in an increase of about five cents per liter for unleaded fuel at the pump, from the current aveage of 1.35 euros per liter to 1.40 euros per liter.

In the diesel category, the special consumption tax will increase from 330 euros to 410 euros per 1,000 liters, which will result in a hike of eight cents per liter, from one euro per liter to 1.08 euros per liter.

As for heating fuel, the special consumption tax will increase from 230 euros to 280 euros per 1,000 liters, leading to a retail price increase of six cents per liter, from 75 cents per liter to 81 cents per liter.

The tax imposed on auto LNG will be increased from 330 euros to 430 euros per 1,000 liters.

Natural gas used at gas-fuled power stations will be exempted from the special consumption tax as a measure aiming to support the country’s industrial sector.

Natural gas demand for auto sector doubles in a year

DEPA, the Public Gas Corporation, doubled sales at its natural gas fueling stations in the first quarter of 2016 compared to the equivalent period last year, a trend that confirms the rapidly growing demand for natural gas in the auto sector.

Currently operating eight natural gas fueling stations – under the company name Fisikon – DEPA plans to expand its network to ten stations by June. The corporation expects to have increased the network to 12 stations by the end of the year and 17 by the end of 2017.

Besides having launched a strategy promoting the use of new cars running on natural gas, the corporation is also participating in a training program being staged to equip mechanics with the skills required to convert existing conventional vehicles.

ELPE fuel sales up in February, wider turnaround not certain

Fuel sales at ELPE (Hellenic Petrolum) increased by five percent in February, year-on-year, but it remains unclear whether this encouraging company development suggests an overall turnaround for Greece’s fuel market.

Auto diesel fuel sales increased by 15 percent, but heating fuel sales fell by 35 percent, subdued by the warmer-than-usual winter weather, while marine fuel sales increased sharply. More specifically, marine diesel oil sales rose by 50 percent and mazut sales were up 35 percent.

Whether the rise in fuel sales experienced at ELPE in February reflects a wider trend will be made clearer over the next few days when more market data becomes available.

January proved to be a poor month for fuel sales in Greece, compared to the equivalent month a year earlier. Unleaded fuel sales fell by 9.7 percent, auto diesel fuel sales were down 7.7 percent, heating fuel sales dropped by 17 percent, marine diesel oil sales fell by 18 percent, mazut sales fell 10 percent, and LNG sales dropped by 4.7 percent. Jet fuel was the only fuel product to register a sales increase in January compared to the same month a year earlier, rising by 4.3 percent.

Certain market pundits believe that January’s poor fuel sales figures may be linked to the month’s increased fuel stock levels, a customary January condition resulting from bigger orders placed by companies in preceding months, which subsequently reduces order sizes in January.

Sales trends aside, fuel sector officials are alarmed by the reports of possible fuel tax increases. Fuel sales will inevitably decline, the state will lose rather than gain tax revenues, while illicit fuel trading activity will rise as consumers seek cheaper fuel stations, officials warn.

Between 2010 and 2016, auto fuel sales fell by 34 percent and heating fuel demand plunged by 53 percent following two major tax hikes for fuel (special consumption tax and VAT). During this period, between 3,500 and 4,000 fuel stations went out of business, roughly 10,000 ot 12,000 jobs were shed, not including several thousand indirectly linked job losses, while the market was flooded with provisions for bad debt worth millions of euros.

Meanwhile, fuel smuggling practices have remained virtually untouched. An “inflow-outflow” data system legislated by a preceding administration back in 2012 with the objective of tracking petrol station fuel purchases and sales is not yet fully operational. Also, a plan to fit GPS systems onto fuel trucks as a means of monitoring their moves has not been completed. Illicit trade for marine fuel is rampant.

 

 

Subdued fuel market data reflecting economic slowdown

Despite the considerable drop of fuel prices in the Greek market, demand for unleaded fuel and diesel fell in the ten-month period compared to the equivalent period last year, mirroring the economic slowdown prompted by the imposition of capital controls in the summer and maintained in the autumn as a result of the onslaught of tax demands on citizens.

Demand fell by 6 percent, year-on-year, for unleaded fuel in the ten-month period, and 2 percent for diesel. The 6-percent drop in demand for unleaded fuel is not at all negligible. If the decline continues at the same rate until the end of December, this would mean a 151,000-ton drop of unleaded fuel consumption for the year compared to 2014, when 2.55 million tons of unleaded fuel was sold.

Oddly, traffic congestion in Athens appears to have has worsened, especially from September onwards. However, the traffic picture is subdued when looked at from a nationwide perspective. As was pointed out to energypress by Yiannis Aligizakis, president of SEEPE, the Hellenic Petroleum Marketing Companies Association, traffic flow on the country’s national highways has fallen drastically. The transportation sector is also subdued.

Consumption of diesel fuel used for professional purposes, in the transportation sector, has dropped by 20 percent compared to last year, the SEEPE chief noted.

Sector data for local fuel demand had shown encouraging signs during the first half of the year, hinting at some stability for the first time since 2012 and 2013, when auto fuel demand in Greece plunged amid the recession. But the arrival of capital controls last summer, in late June, put an abrupt end to any signs of increased activity. The bad news had first been indicated by market data for the eight-month period, when demand for unleaded fuel fell by 3 percent and 1 percent for diesel.

Unleaded fuel is currently 12 percent cheaper than last year, dropping to 1.40 euros per liter from 1.59 euros. The price of diesel has fallen even more considerably, by 19 percent year-on-year, to 1.11 euros per liter from 1.37 euros per liter. Heating fuel is now priced at 0.83 euros per liter compared to 1.049 euros per liter last year, a 21 percent drop.

Market officials warn the poor fuel demand figures registered in the auto sector for the ten-month period will be worsened once heating fuel data for this coming winter is factored into the equation. Autumn demand for heating fuel has been subdued as a result of the mild weather conditions.