DEPA working on minor issues, anticipating leadership change

Officials at gas utility DEPA are currently patching up on minor matters as they await bigger decisions, including the appointment of a new leadership, from the newly elected New Democracy government’s energy minister Costis Hatzidakis.

There have been no reports so far on candidates that could replace DEPA chief executive Velissarios Dotsis, appointed recently in an interim role.

The new energy minister’s team is currently focused on finding a replacement for former power utility PPC boss Manolis Panagiotakis, who resigned shortly after last weekend’s elections.

However, it is a matter of time before the energy ministry also turns its attention to DEPA and engages itself with the search for a new head official.

The current DEPA leadership is taking care of minor issues that have accumulated as a result of an administrative crisis at the gas utility over the past few months.

These include a plan for the addition of 6 or 7 auto gas stations to DEPA’s current network of 13 stations. This project is entitled to EU funding. Delays have jeopardized this funding.

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.

 

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.