Fluctuating fuel prices paint volatile picture, gasoline nears €2 per liter

Fluctuating crude oil prices in international markets have shaped a very volatile domestic fuel market, the instability raising gasoline prices to more than 2 euros per liter on a number of Greek islands, which has prompted questions as to whether such levels will spread to pumps  throughout the country.

Two key developments have unsettled suppliers and consumers, the first being further EU sanctions imposed on Russian petroleum products, to come into effect February 8. The latest measure will ban Russian oil exports to the EU. Brussels is also examining a price cap for Russian oil sold to non-EU members.

A second factor making impact concerns China’s return to energy markets following the country’s departure from a zero-Covid policy and whether the subsequent increase in Chinese demand will lead to shortages.

Analysts have remained indefinite on the possible effects of both these factors.

According to Greece’s monitoring center for liquid fuel prices, unleaded gasoline rose by 0.076 euros per liter between January 1 and January 29, to 1.918 euros per liter.

The rise in heating fuel prices in Greece was steeper, escalating by 0.162 euros per liter during the same period to reach 1.301 euros per liter. A government subsidy cut on heating fuel was the main factor behind this price increase.

The price rise for auto diesel was milder, increasing by 0.026 euros per liter, to 1.821 euros per liter, between January 1 and January 29.

Refineries have begun reducing their wholesale fuel prices as a result of a recent de-escalation in international prices, since January 20, to be passed on to the domestic retail market in coming days. But the duration of this price de-escalation remains unknown.

Heating alternative costs set for February reshuffle

Heating alternative costs are set for a reshuffle in February. Heating fuel looks like it will become a more expensive heating option, while the cost of natural gas as a heating source is headed down. At this stage, it remains unclear whether electric heating will cost more or less next month as the government is believed to be considering revisions to its electricity subsidies policy, currently offered universally.

Heating source price shifts are expected as a reflection of international market trends. In Greece, heating fuel currently averages 1.3 euros per liter, but rising international oil prices suggests local price hikes are imminent. The price of Brent crude oil rose by 1.5 percent yesterday, reaching 87.47 dollars.

If it weren’t for a rise in the value of the euro against the dollar, heating fuel would have already risen to 1.4 euros per liter in Greece.

Demand in China appears set to grow, which will prompt a further increase in international oil prices. They are expected to reach levels of 90 dollars a barrel over the next few months.

Contrary to oil, natural gas prices are set to drop in Greece next month, once plunging international prices, now below 60 euros per MWh, have been factored in.

A month-ahead system is applied in Greece’s natural gas market, meaning this month’s wholesale gas prices will be passed on to the retail natural gas market in February.

Local retail natural gas, currently priced between 11 and 12 cents per KWh, is expected to fall to levels as low as 6.5 cents per KWh in February, plunging between 40 and 45 percent.

As for electric heating, the prospective cost of this option will depend on the level and structure of February’s electricity subsidies to be offered by the government. Its electricity subsidies package for next month is expected to be announced Monday or Tuesday.

The government is believed to be considering lowering or even zeroing out electricity subsidies for monthly consumption levels of over 500 or 1,000 KWh.

Fuel sales up 2 percent in 2022, higher heating fuel prices in ‘23

Retail fuel sales rose by a marginal 2 percent in 2022, compared to the previous year, a rise attributed to higher auto and heating fuel demand.

Gasoline sales fell by 2 percent, compared to 2021, the biggest drop occurring in the second half of 2022, which, however, was offset by higher demand for diesel and heating fuel, market officials noted.

Demand for auto diesel increased by an estimated 3.5 to 4 percent, driven higher by the country’s continuing rise in tourism, as well as by the economy’s robust performance in 2022.

Heating fuel demand increased as a result of lower prices compared to other heating sources. Heating fuel sales increased by 6 percent as consumers rushed to make the most of government subsidies, ahead of cuts, and discounts offered by refineries.

The finance ministry cut heating fuel subsidies by 10 cents per liter, reducing state subsidies for this fuel to 15 cents per liter from 25 cents per liter.

Also, according to sources, Helleniq Energy, formerly ELPE, will not continue offering a discount of 0.0375 euros per liter for heating fuel to suppliers in the new year.

The combined effect of these revisions is expected to lead to a gradual rise of 14 cents per liter in heating fuel retail prices.

 

 

 

Heating fuel sales surge 60% as prices drop, gasoline demand down 4%

Heating fuel sales in November increased sharply, by 60 percent compared to the equivalent month a year earlier, driven higher by a significant price reduction of roughly 20 percent since October 15, when heating fuel trading commenced for this winter season.

November’s heating fuel sales increase exceeded that of October, when sales rose by 40 percent compared to the same month in 2021.

Heating fuel prices have dropped to levels below one euro per liter. Suppliers in Athens are currently selling at an average price of 0.979 euros per liter, while the average price around Greece is 1.135 euros per liter, well below the level of 1.412 euros per liter in mid-October.

Demand for gasoline in November fell by 4 percent compared to the same month a year earlier, despite a considerable price reduction for unleaded fuel from an average of 2.105 euros per liter on November 5 to 1.888 euros per liter at the end of the month, a drop of more than 10 percent.

November’s decline in gasoline sales reflected a wider trend in the Greek market. Gasoline demand dropped 7 percent in the third quarter compared to the equivalent period last year.

Auto diesel prices fell even more considerably in November, by 12 percent, to 1.828 euros per liter.

Total liquid fuel sales in 2022 are expected to increase by 3 percent compared to last year, according to rough estimates made by market officials. Heating fuel sales have risen by 9 percent over the year’s first ten-month period.

 

 

Natural gas, heating oil retail prices level for November

The recent plunge in international gas prices appears to have neutralized a retail price advantage that had been gained by heating oil, made possible by generous subsidies. Natural gas and heating oil are now at similar price levels for November.

Though natural gas suppliers have yet to announce retail prices for November, their price levels for the month are widely expected to remain unchanged compared to October, at a level of between 11 and 12 cents per KWh.

Besides a subsidy offered by gas utility DEPA, gas prices are also shaped by the TTF benchmark average of the previous month. Amsterdam’s TTF benchmark ended October at levels of between 135 and 145 euros per MWh, well below levels of 200 to 210 euros per MWh a month earlier.

In response, DEPA has greatly reduced its subsidy for consumers from 9 cents per KWh to 2.5 cents per KWh. Deducting the reduced 2.5 cent subsidy results in a retail natural gas price of 11 to 12 cents per KWh.

Heating oil will also be sold at roughly this level, or marginally higher, announcements made yesterday by the country’s refineries and their retail arms, for an extended period of heating oil subsidies, have shown.

ELPE announced it would extend its 6 cent heating oil subsidy (7.5 cents with VAT) until November 15, while Motor Oil informed it will continue offering a price as competitive as that of October.

As a result, consumers can expect heating oil to be priced at less than 1.40 euros per liter for at least another 15 days.

Heating cost comparisons for November still unclear

Heating energy cost comparisons for November regarding natural gas and heating oil remain unclear. Should gas utility DEPA reduce its subsidies, as is anticipated following a sharp recent drop in international gas prices, heating oil would become marginally cheaper, even if heating oil subsidies at refineries are disrupted, as long as the Brent index does not continue rising.

The retail price of natural gas in Greece is currently at 11 to 12 cents per KWh, a level that would exceed 20 cents per KWh without DEPA’s subsidy of 9 cents per KWh. Subsidies of such extent are currently unnecessary as a result of the recent plunge in natural gas prices, dropping to 99 cents per MWh (TTF) yesterday.

This major drop in gas prices will inevitably prompt a reduction in gas subsidies. It is still unclear if energy minister Kostas Skrekas will make any related announcements today or hold back for a latter date.

Heating oil prices have been subdued at a level of 1.35 euros per liter, or 12 to 13 cents per KWh, as a result of two separate subsidies, a state subsidy, to be provided until at least the end of the year, worth 25 cents per liter, and an additional subsidy of 7.5 cents per liter, being offered by refineries until the end of October, according to their announcements. It remains unclear if refineries will continue subsidizing heating oil beyond October.

HELLENiQ ENERGY heating oil discount, price below €1.40/lt

HELLENiQ ENERGY, formerly ELPE (Hellenic Petroleum), has decided to offer an additional discount to heating oil suppliers that will result in a retail price for households of less than 1.40 euros per liter, estimated to reach between 1.37 euros and 1.39 euros per liter. These price levels that take into account a state subsidy of 0.25 euro per liter.

The company plans to offer a further discount of 5 percent by November 21, which, if implemented, will lower the retail price of heating oil to 1.33 euros per liter.

Until early yesterday evening, heating oil retailers had set price levels of between 1.44 euros and 1.49 euros per liter, while, earlier in the week, projections had forecast price levels of between 1.50 euros and 1.55 euros per liter, now seriously undercut.

HELLENiQ ENERGY based its decision to offer an additional discount on a strategy support residential consumers challenged by high energy costs and higher living costs in general.

 

Natural gas regains place as lower-cost heating option compared to oil

Natural gas heating has regained its place as a lower-cost heating option to heating oil, courtesy of a gas subsidy support. At current price levels, natural gas heating is estimated to be approximately 20 percent cheaper than heating oil.

Gas suppliers have set their October prices for households at levels of about 0.11 euros per KWh, unchanged from last winter. Subsidies offered by state-controlled DEPA Commercial will reduce this price level to 0.09 euros per KWh. Without any subsidy support, gas prices for household heating would just about double to 0.21 euros per KWh.

Unlike gas suppliers, heating oil suppliers have not been able to set their prices, despite the fact that winter trading for this fuel begins in two days, as a result of wildly fluctuating prices in markets, making it impossible to make projections.

Given the current market conditions, heating oil prices will be set anywhere between 1.40 and 1.50 euros per liter, a level of about 1.45 euros per liter seeming most probable.

These heating oil price levels take into account state subsidies of 0.25 euros per liter. Without the state subsidy support, heating fuel would reach between 1.65 and 1.75 euros per liter.

Fuel cost instability causing market confusion, uncertainty

Wildly fluctuating fuel prices are causing confusion in the petroleum market. Yesterday, officials witnessed an unanticipated plunge in Platts heating fuel prices for the Mediterranean, down by 120 euros per ton, a reduction resulting in a retail price of 1.45 euros per liter for households in Greece, well under Monday’s forecasts that had projected price levels in excess of 1.55 euros per liter.

Market officials have not attributed this sharp price drop for heating fuel to supply and demand factors. With winter trading for this fuel set to begin on October 14, market uncertainty is high.

Meanwhile, diesel prices are moving in the opposite direction, continuing along their upward trajectory. Quite extraordinarily, the cost of diesel now steadily exceeds that of gasoline, despite traditionally being far cheaper.

This unusual trend has been attributed to an increase in demand for diesel amid the energy crisis. An increasing number of industrial consumers in Greece and other parts of Europe are turning to diesel as an alternative to natural gas in an effort to save on energy costs.

Contrary to diesel, demand for gasoline in Greece has fallen, dropping 15 percent, according to market officials, as a result of less vehicle usage. The end of the summer tourism season has also contributed to this decline.

 

Elevated heating fuel prices seen, OPEC decision impact awaited

Heating fuel prices are likely to begin the winter trading season, starting October 15, at an elevated level of between 1.50 and 1.55 euros per liter, market officials have indicated.

Heating fuel subsidies, to be offered to households based on income criteria, stand to lower heating fuel prices to between 1.15 and 1.20 euros per liter.

Pricing predictions for winter remain uncertain as petroleum firm officials are awaiting the impact of a recent OPEC decision to cut back on output before finalizing their calculations. Market developments this week will be instrumental in the level of heating fuel prices to be set by petroleum firms.

If confirmed, heating fuel prices of between 1.50 and 1.55 euros per liter would place struggling households under even greater financial pressure. Fuel-based heating has been seen as a favorable option by many households for this coming winter, given the hefty electricity price increases. However, heating fuel prices of between 1.50 and 1.55 euros per liter would act as a deterrent for many households.

Gas heating, taking into account a gas subsidy of 90 euros per thermal MWh offered by gas company DEPA Commercial, is expected to cost 0.11 or 0.12 euros per KWh in October, sources informed.

At these levels, gas heating remains a lower-cost alternative to fuel-based heating for households not eligible for heating fuel subsidies.

Gas heating most affordable option following new subsidy

The energy ministry has announced a natural gas-heating subsidy of 9 cents per liter, making gas heating the lowest-cost heating solution for households – compared to fuel and electricity – despite a 300 percent natural gas price increase compared to a year ago.

This gas subsidy comes as crucial support for the mass of households that took pre-crisis decisions to convert to gas heating over the past decade or so, only to see gas prices skyrocket in recent months.

Taking into account the gas subsidy, announced yesterday by energy minister Kostas Skrekas, gas heating will begin the winter season at 12 cents per liter (120 euros/MWh), below the cost of 13 to 14 cents per liter for heating fuel and 16 cents for electricity heating.

The gas heating subsidy level is based on the assumption, by gas companies, of TTF price levels of roughly 200 euros per MWh in coming months.

Given the aforementioned figures, the heating cost for a 100 square-meter apartment requiring 9,000 KWh for heating over a winter is 1,000 euros for gas heating, 1,250-1,300 euros for fuel heating, and 1,450-1,500 euros for electricity heating.

Without the gas heating subsidy, the resulting gas heating cost, priced at 21 cents per liter, would reach nearly 2,000 euros for a 100 square-meter property.

 

 

Heating fuel subsidy boost for minimal electricity heating

Heating fuel subsidies will continue being offered universally in Greece this coming winter, but at a higher level, up to 20 cents per liter, or 25 cents per liter including VAT, along with more generous income criteria, as the government wants to make fuel-based heating the lowest-cost heating solution this winter in order to minimize the number of households turning to electricity for heating.

Increased electricity usage would mean increased demand for natural gas, the costliest energy source at present. Natural gas represents roughly 40 percent of overall electricity generation in Greece.

The new subsidy package for fuel heating is expected to enable all consumers to purchase heating fuel at a level of 1.30 to 1.40 euros per liter, instead of 1.60 euros per liter, the price level if supply were to start now.

Heating fuel subsidies in Greece were worth a total of 174 million euros last winter, a sum seen rising to 300 million euros this season.

The number of households eligible for heating fuel subsidies is expected to increase to 1.3 million from 800,000 last winter as a result of a planned income criteria revision widening the offer’s eligibility.

The offer’s personal income criterion is expected to increase to between 17,000 and 18,000 euros per annum from 14,000 euros at present for single-resident homes, while corresponding income criteria rises will be made for families.

 

Heating fuel demand up 40% in January, power cost a factor

Heating fuel demand in 2021 was 17 percent lower than in the previous year, but, even so, demand for this fuel has been making a strong comeback over the past four months as elevated electricity prices have prompted a greater number of consumers to turn to heating fuel for heating, domestic petroleum sector officials have told energypress.

Demand for heating fuel in January rose by 40 percent, compared to the equivalent month in 2021, while demand for this fuel increased by 58.5 percent between mid-October last year – when heating fuel was made available in the market for this winter season – and December 31, 2021 officials noted.

Petroleum sector officials described the rebound as a clear comeback for heating fuel, despite this market’s 17 percent contraction in 2021.

Heating fuel demand between January and April, 2021 was 30 percent lower compared to the equivalent period in 2020, a year during which heating fuel demand was boosted by exceptionally lower prices.

Heating fuel sales in 2021 totaled 1.04 million metric tons, down from a total of 1.25 million metric tons in 2020.

Energy crisis prompts heating cost turnaround, gas most expensive

The intensity of the energy crisis has brought about radical change to the market, making natural gas, until recently regarded as a lower-cost heating option, more expensive, a study conducted by the National Technical University of Athens (NTUA) and the Chemical Process Engineering Research Institute (EKETA) has confirmed.

Heating fuel, if taking into account subsidies offered by the Greek State, is the most affordable heating option under the current market conditions, the study found.

Pellet heating is also one of the most affordable options, the study noted.

Heating fuel demand skyrockets 185%, costlier power a factor

Heating fuel demand skyrocketed 185 percent in October compared to the equivalent month last year, despite higher price levels, 45 percent over prices registered a year ago, a trend that has been attributed to three main factors.

Firstly, households have been encouraged to use their oil-based heating systems by a broader subsidy support package introduced for this winter, expected to benefit one million households with amounts ranging from 100 to 750 euros. Last winter, approximately 700,000 households were eligible for heating fuel subsidies.

Secondly, households are placing heating fuel orders now fearing further price rises could lie ahead.

Thirdly, the sharp increase in electricity costs brought about by the energy crisis has prompted consumers to put aside electric heaters and return to oil-heated radiators, which, in many cases, had been left unused for some years.

 

Fears of energy market unpaid receivables rebound growing

Government as well as electricity and natural gas company officials appear increasingly concerned about a rebound in unpaid receivables at energy firms as a result of exorbitant energy price increases faced by consumers.

The scale of the ongoing energy crisis plus the inability of analysts to make confident price projections has government officials scrambling for solutions, including through EU action, that could lessen the energy cost burden for consumers and protect supplier cash flow.

During a meeting yesterday with European Commission Vice-President Margaritis Schinas, Greek Prime Minister Kyriakos Mitsotakis reiterated a European Commission proposal for revisions that could enable energy bill payments through installments.

According to sources, the Greek government could insist on a proposal made by energy minister Kostas Skrekas for the establishment of an EU transitional compensation fund, supported by CO2 emission right revenues, distributing amounts to member states as energy-crisis aid.

The Prime Minister suggested this proposal during his meeting with the European Commission deputy, who did not offer a direct response but indicated that a European solution would be sought during an EU summit scheduled for next week, sources said.

Support for energy consumers would also help the finances of suppliers, who, as a result, would be in a better position to offer energy bill payments through installments.

 

Heating fuel season begins with sharply higher prices, up 45%

The country’s heating fuel season gets underway tomorrow with sharply increased prices ranging from 1.13 to 1.15 euros per liter in urban areas and over 1.20 euros per liter in remote areas, including islands, representing a 45 percent increase compared to a year ago.

A year earlier, heating fuel prices averaged 0.798 euros per liter, driven lower by the pandemic-induced drop in demand.

The heating fuel price rise for this winter season has been attributed to a rebound in demand following the lifting of Covid-19 restrictions, combined with the price surge in international energy markets, also impacting the price of heating fuel, used by hundreds of thousands of homes around the country.

Households are moving fast to place their heating fuel orders, fearing further price rises, supply company officials have informed.

However, the quantities being ordered are smaller compared to a year earlier, the officials added, a trend highlighting the increased financial challenges faced by households.

 

Natural gas prices double last year’s levels, alarm widespread

Retail gas prices are seen increasing by at least 100 percent in October, compared to a year earlier, the lowest level at present being 40 euros per MWh, double the level of a 20-euro per MWh price in the equivalent month last year.

The situation, caused by an unfavorable combination of factors in international markets, is truly alarming as market officials admit not being able to forecast any limit to the upward trajectory.

Natural gas prices at the pivotal Dutch TTF platform yesterday reached 75 euros per MWh, up from 40 euros per MWh in July, 50 euros per MWh in mid-August and 60 euros per MWh in the first ten days of September.

The price surge appears set to come as a shock for natural gas consumers between October and December. It places many gas companies, especially smaller ones, under extreme pressure, and is a major headache for the government, which could need to deliver a new round of subsidy support measures as a follow-up to initial 150 million-euro support action offered to help consumers combat higher electricity prices.

Gas company officials insist that, even under such extreme market conditions, gas will remain a lower-cost option compared to heating fuel.

 

EU’s ‘Fit for 55’ package to spike heating, auto fuel costs

The EU’s new, more ambitious climate-change package, “Fit for 55”, aiming for a 55 percent reduction of carbon emissions by 2030, compared to 1990 levels, will prompt sharp price increases in diesel heating fuel costs as well as fossil-fuel powered transportation.

The prospective package, announced yesterday in the form of twelve legislative proposals, has already raised the question as to who will cover its cost – consumers, producers, or both.

The package will lead to wider implementation of the ETS for buildings and transportation.

Inevitably, less affluent households and smaller enterprises whose heating and transporation needs are exclusively covered by fossil fuels will face even greater pressure.

The European Commission has proposed a 61 percent reduction of carbon emissions from sectors covered in the EU’s existing Emissions Trading System (ETS), compared to 2005 levels, up from the previous target of 43 percent.

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.

 

Schools, airlines, heating fuel to contain lockdown effects on fuel

Fuel market officials are hoping certain lockdown exemptions, such as the non-closure of primary schools, plus airline traffic and heating fuel demand, will result in smaller losses for the sector compared to the country’s first lockdown earlier this year.

If the latest measures remain as they stand for the lockdown’s duration of at least three weeks, beginning last Saturday, then the decline in fuel sales is expected to be far milder than the 45 percent reduction experienced during the country’s first lockdown, implemented last March, fuel market officials have projected.

Seasoned authorities estimate the fuel market’s reduction in sales could reach 20 percent.

The ongoing transportation by parents and guardians of primary school students to school, continuation of flights, as well as greater heating fuel needs of household members kept in by the lockdown, are all expected to help contain the drop in fuel sales.

Though these factors may offer fuel professionals some consolation, the fuel market is entering uncharted territory as the eventual duration of the lockdown remains unknown.

Also, a large number of households have yet to recover from the financial consequences of the first lockdown. Their budgets will have tightened.

Oil firms troubled by heating subsidy revision for gas, firewood inclusion

Petroleum product traders are troubled by government thoughts to broaden the eligibility of heating subsidy support so that, besides heating fuel, three new categories, natural gas, firewood and pellets, are also added to the list.

Contrary to natural gas, heating fuel is overtaxed, while the encouragement, through subsidies, of firewood as a heating source does not make environmental sense given the high levels of resulting smog, petroleum industry sources have pointed out.

High levels of smog have been recorded in Greek cities during winters over the past decade or so as struggling households have sought lower-cost heating amid the recession.

Heating subsidies are already limited and barely cover the needs of underprivileged households, petroleum industry officials have noted, fearing their share of the total could diminish if other heating sources also become eligible.

Heating fuel supply for the approaching winter season began yesterday at a level of 77 cents per liter, 2 cents lower than the price level at the close of last season’s trading, in May. Heating fuel prices are forecast to remain low, sources said.

Despite the lower price level, demand was subdued on opening day, yesterday. Many consumers took advantage of last season’s price drop and are already stocked up. In addition, temperatures around Greece remain mild.

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.

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.

 

 

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.

Local heating fuel begins trading today 20% higher than last season

Heating fuel for the upcoming winter begins trading today in the Greek market approximately 20 percent higher than prices last season, primarily as a result of taxes and higher international fuel prices.

Last season, heating fuel began trading at a level of 94.4 cents per liter in October, 2017 before reaching 1.025 euros per liter in April, according to official Greek economy ministry data.

This season, heating fuel will begin trading at 1.14 euros per liter, according to market estimates.

Higher fuel taxes in Greece and rising international fuel prices have prompted a major drop in local demand for heating fuel as households have turned to more affordable heating alternatives.

Greek heating fuel demand has dropped by 72 percent between 2003, a record year when domestic consumption peaked at 4.25 million tons, and 2017, official market data has shown.

Local heating fuel prices seen rising by 20% this winter

The cost of heating fuel in the Greek market is expected to increase by 20 percent this winter compared to last winter season as a result of higher  international fuel prices.

The retail price for heating fuel orders amid the current market conditions would be set at around 1.14 euros per liter compared to roughly 0.95 cents per liter last winter, local traders have estimated.

The anticipated price rise has raised concerns among traders who dread a further slump in heating fuel demand this winter following a 20 percent drop last season, primarily as a result of the mild winter. Many traders struggled to remain afloat.

Brent crude oil prices have exceeded 81 dollars per barrel over the past few days and American crude oil prices are now close to 72 dollars per barrel. Despite a slight drop yesterday of about half a percentage point, oil prices, on an upward trajectory, have risen to their highest levels of the past four years. In forecasts made yesterday, analysts predicted the Brent price would reach 82 dollars per barrel during the final quarter of 2018.

Responding to the rising fuel prices, Greek refinery officials reminded that a special consumption tax (EFK) and other taxes represent 46.2 percent of the retail price for heating fuel.