PPC mazut, diesel order for 2021 at €580m, reduced figure

Power utility PPC’s total cost, in 2021, concerning mazut and diesel orders needed to cover the company’s electricity generation needs at facilities on islands, lignite-fired power stations and mining machinery has been estimated at 580 million euros, according to figures presented by chief executive Giorgos Stassis to parliament’s Standing Committee on Production and Trade.

PPC plans to be supplied a total of 820,000 metric tons of low-sulfur mazut order in 2021 for its generators on islands. More than a quarter of this amount, or 240,000 metric tons, will be directly delivered to its Atherinolakkos unit in southeastern Crete.

PPC staged a three-round tender early this year for low-sulfur mazut orders covering April 1, 2021 to March 31, 2022, to be shipped to its facilities in coastal Lavrio, southeast of Athens, and Atherinolakkos, Stassis, the CEO, told the committee.

Initial offers were submitted by a total of ten bidders, of which two emerged as preferred bidders, PETROINEOS TRADING LTD, to supply 580,000 metric tons of mazut to PPC’s Lavrio facility, and CORAL ENERGY PTE, to supply 240,000 metric tons to the Atherinolakkos unit.

The total cost of PPC’s orders from both suppliers is 11.2 million dollars less than the power utility’s order for 2020 and 4.2 million dollars less than the 2019 order, the chief executive informed.

PPC signed an extension to an existing diesel supply agreement with EKO, now expiring December 31, 2021, Stassis informed. The total cost of PPC’s diesel orders in 2021 has been estimated at 250 million euros, not including VAT.

Diesel-fueled power facilities on interconnected islands to go

Power utility PPC’s old diesel-fueled power facilities generating electricity on the Cyclades until this group of islands was interconnected with the mainland grid via subsea cable will soon be completely withdrawn, the current status of these facilities, as back-up units, deemed costly and unnecessary by RAE, the Regulatory Authority for Energy.

No changes will be made this coming summer but the withdrawal of the units, as back-up systems, is expected as of next year, once certain legal and administrative issues are settled.

The interconnecting subsea cables, inflowing and outflowing and offering the Cyclades islands electricity input from two sides, have rendered the back-up units unnecessary as this back-up service is provided by the cables themselves, according to RAE sources.

Islands in the wider region still being supplied electricity through just one subsea cable continue to require back-up, but this service does not need to be provided by the high-cost diesel power units, RAE believes.

RAE has not approved a related proposal submitted by power utility PPC, firstly because of their high cost, and secondly, as compensation of the units, for their strategic back-up services, would need the European Commission’s approval.

Instead, RAE appears to favor a solution entailing the use of portable generators that could be transferred from one island to another, wherever and whenever needed. These generators would be leased by the distribution network operator DEDDIE/HEDNO, a PPC subsidiary, while their cost would be incorporated into the operator’s operating expenses.

Meanwhile, RAE’s board is soon expected to approve a PPC lease plan for generators offering 58 MW, to be installed on Crete as back-up for the busier summer months of July and August.

PPC staging tender for generators as back-up on Crete this summer

Power utility PPC has just announced a tender for leasing contracts concerning power generators with a total capacity of 58 MW for Crete, to serve as back-up for grid sufficiency on the island during July and August, in anticipation of the tourism-related peak in electricity demand.

The generators, to be installed at PPC’s power station at Atherinolakkos, southeastern Crete, are intended to back an imminent subsea grid interconnection linking the island with the Peloponnese – the first step of a bigger interconnection project to reach Athens – which will have only been in operation for a few months when summer arrives.

The Crete-Peloponnese power grid interconnection is expected to be ready for launch in late April.

PPC’s plan for generators, budgeted at approximately 4 million euros, has been divided into two sections, one for 23 MW, the other for 35 MW. Participants can only submit offers for one of the tender’s two sections.

According to the tender’s terms, PPC will maintain the right to extend the lease contracts for all or some of the generators by a month, also covering September, if needed.

Distribution network operator DEDDIE/HEDNO has estimated that Crete will need between 75 and 80 MW in additional capacity this summer. Besides the 58 MW to be provided by the generators through the tender, PPC will secure the required remainder through back-up solutions already possessed by the power utility.

If all goes according to plan, PPC’s rented generators, mobile units running on high-cost diesel, will not need to be used at all while stationed on the island, meaning the initiative’s total cost would be limited to the value of the lease agreements.

Motor Oil launches west Balkan growth plan, under Shell brand, in Croatia

Petroleum retailer Coral, a member of the Motor Oil group, is eyeing west Balkan markets, troubled by gasoline and diesel quality and trading concerns, on the strength of the strong Shell brand name it represents.

The Motor Oil group acquired Shell Hellas in 2010 in a deal licensing the company to market the multinational’s brands. Motor Oil then renamed Shell Hellas as Coral and, approximately four years ago, founded companies in North Macedonia, Albania, Montenegro and Serbia.

Coral’s acquisition of a 75 percent stake in petroleum retailer Apios, holding a 3 percent share of the Croatian market and operating 26 petrol stations in the country, represents the beginning of the Greek firm’s growth plan for the west Balkan region, company officials said.

Croatia, this investment plan’s launch pad, is backed by robust economic projections. The country’s tourism industry has enjoyed solid growth over the past two years, generating increased revenues for petroleum firms.

Beyond Croatia, Coral plans to soon open two petrol stations in North Macedonia, under the Shell brand name. The company is also planning to enter the markets of Albania and Montenegro, where it also maintains the rights to use the Shell brand name.

Coral already operates five petrol stations in Serbia and is preparing to launch an additional six in this country.

 

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.

 

PPC wants compensation for island support, tax exemption

Power utility PPC has raised a compensation claim for its maintenance of high-cost diesel-fueled power stations on islands – both interconnected and now in the process of being interconnected – as back-up, while also calling for an exemption from a special consumption tax (EFK) on the diesel it uses to run these facilities.

The two requests were expressed by PPC through public consultation held by power grid operator IPTO for its ten-year development plan covering 2021 to 2030.

To this very day, the power utility has fully met the grid operator’s requests concerning provision of back-up services to ensure uninterrupted electricity supply to consumers on the Cyclades, yet, despite the corporation’s initiatives and the costs it has shouldered, which are growing, an appropriate regulatory framework ensuring sustainability for this service has not been established, PPC noted in the public consultation procedure.

PPC energy outlay falls €886m, key to strong 3Q results

A decreasing reliance on lignite-fired power stations, nowadays an extremely costly generation option as a result of high-priced CO2 emission rights; lower wholesale electricity prices; and a drop in diesel and natural gas prices reduced power utility PPC’s energy expenses by 885.6 million euros in the nine-month period, to 1.4 billion euros from approximately 2.1 billion euros in the equivalent period a year earlier, the power utility has reported.

This cost reduction, spearheaded by chief executive Giorgos Stassis and his administration, played an important role in favorable results announced yesterday.

PPC’s liquid fuel expenses fell by 33 percent to 357.5 million euros during this year’s nine-month period as a result of the corporation’s lower liquid fuel-based generation as well as lower mazut and diesel prices.

The nine-month natural gas outlay for PPC also fell significantly, by 41.8 percent, to 206 million euros from 353.7 million euros, as a result of a 42.4 percent drop in natural gas prices.

PPC’s CO2 emission right expenses fell to 263.1 million euros in the nine-month period, from 406.9 million euros in the equivalent period of 2019, as a result of the company’s reduced emission levels, down to 10.9 million tons from 17.9 million tons.

The power utility’s lignite-based generation during the nine-month period dropped by 50.6 percent year-on-year.

PPC appears to have given space to rival electricity producers in the nine-month period, while increasing its operating profit, despite a retail market share contraction to 69.3 percent from 76 percent a year earlier.

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.

Lower-cost gas may save PPC an estimated €100m this year

The sharp drop in energy product prices, pressured by the coronavirus outbreak and an oil price war between Russia and Saudi Arabia, promises major and unexpected financial relief for power utility PPC.

The plunge of gas prices, alone, should benefit the Greek power utility by an estimated 100 million euros this year – assuming this drop is not ephemeral.

In the first half of 2019, PPC’s total purchasing cost for natural gas reached 222.5 million euros, a 57.1 percent increase.

In the liquid fuels category, PPC’s purchase expenses were also elevated, reaching 319.7 million euros, as a result of higher prices paid for mazut and diesel used by the utility at power stations on non-interconnected islands. To the delight of PPC, mazut and diesel prices are also tumbling.

Electricity tariff hikes made by PPC last September as well as a revised payback plan offering consumers greater incentive to service electricity-bill arrears through monthly installments are both producing favorable results.

A series of memorandums of cooperation, such as an agreement signed this week with Germany’s RWE, all promising dynamic penetration into Greece’s renewable energy market, offer further potential for PPC.

However, the power utility still faces an uphill struggle along its road to recovery. PPC’s financial results for 2019 will be announced in April.

 

DESFA seeking FSRU, LNG tankers for Crete energy solution

Greek gas grid operator DESFA is looking to further establish its FSRU proposal for LNG supply to Crete, an initiative included in its ten-year development plan.

DESFA, nowadays controlled by a three-member consortium consisting of Snam, Enagas and Fluxys, has begun exploring FSRU solutions and their cost for Crete, where gas supply would be used for electricity generation to help make up for the  closure of high-polluting diesel units totaling 100 MW.

DESFA has set a January 20 deadline for the submission of FSRU rent or purchase offers by interested parties.

The gas grid operator requires a facility with a 125,000 cubic-meter capacity that can anchor close to the Atherinolakkos power station in southeast Crete.

The overall project will also require an LNG tanker for transportation purposes – minimum capacity of 20,000 cubic meters. This tanker will also be used as a storage facility.

In addition, the DESFA plan includes a 10,000 cubic-meter LNG carrier to execute approximately 75 shipments per year.

As has been previously reported, RAE, the Regulatory Authority for Energy, has asked DESFA to further process its proposal for the installation of an LNG terminal off Crete to counter energy shortage issues until 2023, when submarine grid interconnections with the mainland are expected to be completed.

In addition, RAE plans to install a new 100-MW natural gas-fueled unit on the island as well as new RES units, for solar and wind energy, with a total capacity between 100 and 150 MW.

The installation of batteries for energy storage totaling 40 to 50 MW also features in the Crete plan.

 

Time insufficient for Crete diesel units switch to gas, will cost

Power utility PPC has admitted it does not have enough time to convert old, high-polluting diesel-fueled power stations operating on Crete into natural gas-fueled units by 2020, as it had previously assured, energypress sources have informed.

Though the island does not appear likely to experience an energy sufficiency problem, the cost of preventing a shortage will be considerable and will be covered by consumers around the country through elevated public service compensation (YKO) surcharges included on electricity bills.

Crete’s ageing diesel-fueled units, offering a total capacity of 100 MW, were given lifespan extensions in June through a legislative amendment delivered by the previous energy minister Giorgos Stathakis, without EU approval. EU fines cannot be ruled out.

This additional operating time is intended to provide cover until the launch of a small-scale grid interconnection to link Crete with the Peloponnese, expected at the end of 2020. A large-scale interconnection linking Crete with Athens is expected in 2023.

The conversion of the old power stations into gas-fueled units has constituted part of an overall plan to ensure energy sufficiency on Crete between 2020 and 2023.

Besides the high cost entailed in running these old power units, energy sufficiency on Crete is made even more expensive by high-priced leasing costs of power generators deployed on the island every summer to meet higher tourism-related electricity demand.

Plans for the installation of an FSRU off Crete appear to have also run into problems. Gas grid operator DESFA has proposed a bigger and permanent onshore LNG terminal installation.

 

DESFA looking to take on needed Cretan FSRU as operator

Gas grid operator DESFA is examining the prospect of taking on a Cretan FSRU project for LNG imports to the island, one of the measures being planned to protect Crete’s energy sufficiency between 2020 and 2023, when a large-scale grid interconnection with Athens is expected to be completed.

Old high-polluting power stations operating on Crete by power utility PPC will need to be withdrawn by the end of this year.

A small-scale grid interconnection is planned to link Crete with the Peloponnese as of 2020, but the island’s energy security issue will not be completely resolved until 2023, with the anticipated launch of the large-scale link to Athens.

RAE, the Regulatory Authority for Energy, has asked DESFA to consider the prospect of taking on the Cretan FSRU, as operator, which would incorporate the unit into the national energy system. Otherwise, a tender will need to be staged to seek another operator.

LNG supply to Crete is seen as essential for ensuring the island’s energy sufficiency during the crucial three-year period.

The Cretan energy security plan includes converting PPC’s 100-MW diesel-fueled units, situated at Atherinolakkos, into gas-fueled facilities. In addition, a new power station, preferably gas-fueled, is planned to be installed on Crete for a further capacity of approximately 100 MW.

 

 

Crete RES auctions, storage system tender planned for 2019

RAE, the Regulatory Authority for Energy, looking to protect Crete against energy shortages as of the end of this year, when old power generators operating on the island will need to be withdrawn, is planning new RES auctions for solar and wind energy units, as well as a tender for the installation of a modern energy storage system.

Crete faces a crucial energy sufficiency period between 2020, when the island’s small-scale grid interconnection with the Peloponnese will be launched, and 2023, when a large-scale link with Athens is expected to operate – if all goes according to plan.

The authority is planning to stage the RES auctions within 2019. RAE is also expecting a decision from DEDDIE/HEDNO, Greece’s distribution network operator, determining two or three points on Crete’s grid as suitable for the installation of modern energy storage systems offering a total capacity of between 30 and 40 MW. Once the operator has forwarded its proposal, a RAE tender will follow, within 2019, inviting investors to submit offers for the energy storage systems to be installed on Crete.

They will be portable, enabling transportation to other islands, should the need arise, sources informed.

RAE is referring to the results of a study conducted by the National Technical University of Athens (NTUA) on the island’s energy sufficiency between 2020 and 2023.

Besides new RES facilities and the storage system, the RAE plan includes the conversion of 100-MW diesel-powered units at Atherinolakkos into natural gas-fired power stations, as well as the development of a new power station, preferably gas-fired, with a capacity of roughly 100 MW.

These measures are seen as optimal in terms of energy sufficiency, feasibility and environmental protection.

 

Ministry planning Crete diesel unit extensions beyond 2019

The energy ministry is preparing a legislative amendment to extend the lifelines of all diesel-fueled power stations operated by the state-controlled power utility PPC on Crete, despite EU regulations requiring the gradual withdrawal of these high-polluting units in 2020 and 2021.

The ministry wants a longer life for PPC’s diesel-powered units to avoid energy shortage problems on Crete until the island’s grid interconnections with the Peloponnese and Athens are completed and launched, in 2022 and 2023, respectively, as is anticipated. PPC needs to be legally covered to keep these units running.

Last October, the European Commissioner for Climate Action and Energy Miguel Arias Canete made clear that Greece will not be granted any further deadline extensions beyond December 31, 2019 for the diesel-fueled power stations operating on Crete.

Three diesel-fueled power stations with a total capacity of 728 MW currently operate on Crete. The island’s electricity demand is currently at a level of 630 MW and is expected to exceed 700 MW in 2020.

Overall Greek fuel demand continued slide in 2018, falling 5%

Volume-based fuel sales fell by 5 percent in 2018, driven lower primarily by weaker gasoline and heating fuel demand, which dropped by 5 and 17 percent, respectively, according to data released by SEEPE, the Hellenic Petroleum Marketing Companies Association. The drop in auto diesel demand was milder, falling 1.5 percent.

These latest figures, four months following Greece’s exit from the country’s bailout program, do not bode well for the economy, fuel data being a key indicator of its prospects.

The SEEPE figures could have been worse had it not been for the cold weather experienced in December, which generated a 15 percent increase in monthly demand for heating fuel.

Despite the latest slide in overall fuel demand, the extent of the drop is smaller compared to slumps of previous years during the recession, which has led to successive fuel demand reductions over the past seven years. Heating fuel demand has slumped by a total of 43 percent during this period.

Fuel taxes in Greece have played a big role in this weakened demand. Greece’s Special Consumption Tax (EFK) imposed on fuel is Europe’s third highest, behind the Netherlands and Italy, while the VAT rate, at 24 percent, is the continent’s fifth highest. Greek gasoline prices are the EU’s third highest. Netherlands tops the list and is followed by Italy. VAT rates in most developed EU states range between 19 and 21 percent.

Greece’s VAT-EFK combination is causing double taxation – or tax on taxes.

The influence of euro-dollar exchange rates has impacted fuel prices in Greece at an extent of between 30 and 40 percent. Local retail fuel prices are mainly shaped by fuel taxes to a degree of between 60 to 70 percent, well over the EU average. The fuel tax proportions are lower in member states such as Germany, Finland and France, where disposable income levels are far higher than in Greece.

 

 

Athens defies Brussels limit for Crete’s diesel power stations

The energy ministry appears to have decided not to restrict the operating capacity of Crete’s diesel-fired power stations by the end of 2019, when a European Commission extension for these high polluting units expires, as all alternatives examined to cover a consequent energy sufficiency shortage on the island are seen as high-cost solutions.

Though Greece’s interest for a further operating extension has not been officially rejected by Brussels, the European Commissioner for Climate Action and Energy Miguel Arias Canete recently made clear the country will not be granted more time.

Energy minister Giorgos Stathakis is counting on an increased level of understanding by the European Commission, given the looming energy shortage threat on Crete, as well as lengthy procedures implemented by Brussels officials in reaction to environmental violations.

A prolonged operating period of Crete’s diesel-fired power stations, covering electricity needs until a submarine power cable connection linking the island with the Peloponnese is completed, should make the energy scare manageable.

Taking into account higher electricity demand levels anticipated on the island, an additional 50 MW should be needed in 2019 and 70 MW in 2020, according to a DEDDIE/HEDNO (Hellenic Electricity Distribution Network Operator) study that was reportedly presented at an Athens meeting this week.

Small units to be transferred from Rhodes and, possibly, leasing of other units for Crete, are planned to cover this extra demand.

RES investment boom planned for 55% of total output by 2030

Investments totaling 32.7 billion euros will need to be made between 2020 and 2030 for the RES sector’s penetration level to rise to 32 percent of energy consumption and 55 percent of electricity production, as well as for a 63 percent reduction of greenhouse gas emissions and energy savings of 32 percent, according to a National Energy and Climate Plan, forwarded yesterday by the energy ministry for public consultation.

The aforementioned investment amount includes 8.5 billion euros for RES power generation, 5.5 billion euros for electricity system infrastructure, 1.9 billion euros for new power stations and upgrades of existing facilities, 3.3 billion euros for distribution network development and digitization projects, 2.2 billion euros for cross-border natural gas pipes, 2 billion euros for natural gas networks and storage units, 300 million euros for research and innovation, and 9 billion euros for energy efficiency.

The overall plan foresees major RES penetration, to be driven by reduced electricity generation costs in the sector, especially PV and wind energy technology, and a withdrawal of old lignite and diesel-fired power stations, whose production costs are expected to increase as a result of higher CO2 emission right costs.

Overall installed capacity for electricity production is expected to increase by 44 percent, according to the plan.

PPC seeking gas, diesel cost reductions through new purchase deals

The main power utility PPC is seeking to restrict its fuel costs at power stations through the establishment of new and improved natural gas purchase agreements.

As noted in its annual report for 2017, the power utility launched this cost-cutting initiative last year by inviting traders to place offers for new three-year LNG purchase agreements.

Already maintaining a purchase agreement with DEPA, the natural gas corporation, PPC is looking to diversify its sources as a means of reducing purchase costs. Natural gas pipeline and LNG supply options are both being considered.

The power utility is also striving to reduce its diesel purchase costs and lower fuel transportation costs to its power stations on the islands.

The launch of new island interconnections, enabling the closure of some of the power utility’s high-cost conventional power stations operating on islands, is expected to favorably impact PPC’s financial results.

 

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.

 

Major fuel demand decline in 2017, signs of life in January

The prolonged bailout negotiations in the first half of 2017 not only impacted bond spreads and business loan interest rates but market sentiment, overall, which has affected fuel consumption levels, officials at Greek petroleum company Motor Oil Hellas noted yesterday while presenting the corporation’s results.

Despite the negative Greek market conditions, the refinery group posted record results as a result of its increased emphasis on exports to make up for lower demand in the domestic fuel market, which appears to be entering a new crisis period.

Overall demand for the corporation’s petroleum products in 2017 fell by 2.1 percent. Gasoline registered the biggest drop, falling 3.1 percent. Diesel demand increased by 0.5 percent while heating fuel, affected by poor activity in December, down by 30 percent compared to the equivalent month a year earlier, fell by over 2 percent, overall.

Latest fuel market data for January showed some signs of improvement for the auto fuel sector but the decline in heating fuel demand was sustained.

Gasoline demand rose by 11 percent in January, diesel demand rose by 23 percent, while heating fuel demand slumped 37 percent.

The significant decline in heating fuel registered for the winter gone by can be attributed to a particularly heavy winter a year earlier, which had boosted heating fuel demand to particularly elevated levels.

Returning to Motor Oil Hellas, overall fuel sales, in volume terms, achieved a new record level in 2017, reaching 13.7 million metric tons, up from 13.04 million metric tons in 2016. The refinery group’s exports exceeded the 10 million mark for the first time, reaching 10.2 million metric tons.

 

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.

 

Local diesel prices now EU’s 5th highest from 15th a year ago

The price of auto diesel in Greece has climbed ten places over the past year, from fifteenth highest to fifth on the EU-28 list, an unprecendented leap for an EU member state, according to seasoned pundits.

A year ago, auto diesel prices in the Greek market were marginally higher than the EU average but are now five percent over the common market’s average of 1.243 euros per liter.

Auto diesel was priced at 1.186 euros per liter on December 19, 2016 and has now risen to 1.303 euros per liter, a 10 percent year-on-year increase.

The sharp price increase of the fuel, prompted by tax increases, has caught many diesel vehicle owners who have switched technologies by surprise.

Finland, the UK, Italy and Sweden occupy the EU’s top four places in terms of auto diesel prices.

Greece has also climbed higher on the EU list of gasoline and heating fuel prices over the past year. Last December, gasoline prices in Greece were the EU’s fourth highest and have since climbed a place to third. The price of heating fuel in Greece has risen from ninth to eighth place in the EU since last December.

The price of gasoline in Greece is currently at 1.534 euros per liter, 13 percent over the EU average of 1.359 euros per liter, according to latest European Commission data.

 

 

Diesel demand up, spurred by greater merchant ship activity

Demand for diesel, used to run merchant ship engines, has increased, spurred by international trade growth during the first half of 2017 to reach the highest level recorded over the past six years.

International trade grew by 5 percent between March and May this year, compared to the equivalent period a year earlier, according to data provided by the Netherlands Bureau for Economic Policy Analysis (CPB).

This rise in international trading activity covers most of the world’s regions, not including Africa and the Middle East, the CPB data showed.

More stable fuel prices this year have contributed to the growth in global trading activity. Sliding consumer spending and lower business investment levels experienced between mid-2014 and early 2016 in most developing countries have now rebounded.

Taking into consideration the increase of global trading activity, most analysts agree that fuel demand will continue to increase in 2017 and 2018. Pundits believe that demand for diesel will grow at a faster rate than that of gasoline.

Global demand for refined petroleum products dropped by 0.5 percent in 2016, the first decline registered since 2009.