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.