Rising fuel sales slow down in May, hit by high prices

Liquid fuel demand, which had been on the rise over recent months after lockdown measures were eased, has slowed down in May, a trend attributed to the efforts of motorists to restrict mileage as a result of record gasoline and diesel prices.

According to latest data provided by fuel traders, gasoline and diesel demand appears set to end May down by 6 percent and 8 percent, respectively, compared to the equivalent month a year earlier.

Gasoline and diesel demand rose between January and April at double-digit rates following the lifting of Covid-19 restrictions.

Unleaded gasoline sales rose 24 percent in January, 29 percent in February, 18 percent in March, and 25 percent in April – as a result of Easter-period travel. Similar sales increases were registered for diesel.

Market officials noted that, despite the rise in fuel sales during the first four months of the year, pre-pandemic demand levels were not fully recovered, reaching about 90 percent of normal levels.

Fuel traders remain deeply concerned about rising fuel prices, not knowing how high price levels may rise and for how long. They have called for a VAT rate reduction on fuel.

 

European social unrest feared as crisis is expected to deepen

Since its outbreak seven months ago, the energy crisis, adding to the economic hardship prompted by the pandemic, has now been pushed to even further extremes by Russia’s war on Ukraine, as higher energy prices over the long term appear likely.

The Russian invasion of Ukraine – following months of increasing gas prices paid by European consumers for Russian gas supplied by Gazprom – is driving energy prices even higher and, by extension, generating further inflationary pressure to limit the purchasing power of Europeans, a catalyst for social unrest.

Under the current market conditions, energy debt will surely rise around Europe, including Greece, as consumers struggle to meet extremely higher energy costs. Also, many energy companies will struggle to stay in business.

Social unrest and a new round of Euroscepticism can be expected once consumers fully realize that higher energy costs are not just ephemeral.

Just one year ago, wholesale electricity prices in Europe averaged between 50 and 60 euros per MWh. In Greece, annual electricity consumption totaling 50 to 55 TWh was worth approximately 3 billion euros.

Yesterday, in response to Russia’s invasion of Ukraine, natural gas prices climbed as high as 144 euros per MWh, before settling at 120 euros per MWh. Natural gas prices of such levels result in wholesale electricity prices of between 250 and 300 euros per MWh, roughly five times higher than a year ago.

Should such price levels remain, Greece’s annual electricity cost of 3 billion euros, until the start of 2021, will become a sweet memory of the past. The country’s additional electricity cost could end up being worth as much as 11 billion euros, if wholesale electricity prices remain at levels of between 200 and 250 euros per MWh.

Factoring in the additional money needed by consumers for heating costs – petrol and natural gas – only exacerbates the problem.

Smart meter installations to combat rising electricity theft

The replacement of conventional power meters around the country with digital power meters planned by distribution network operator DEDDIE/HEDNO, a long-awaited project now scheduled to commence in 2022 and be completed by 2030, will reduce electricity theft by an average of 5.1 percent per year between 2020 and 2031, eventually reducing it to 0.2 percent of overall consumption, a level registered in 2003 and 2004, RAE, the Regulatory Authority for Energy has projected.

Electricity theft in Greece has risen twentyfold over the past fifteen years. Even though DEDDIE/HEDNO has pointed out that the pandemic-induced economic slowdown since 2020 will raise obstacles in the effort to reduce electricity theft, RAE insists the installation of smart meters will directly combat the problem by enabling officials to swiftly identify where electricity theft is being committed.

Electricity theft in Greece has risen from 0.2 percent of overall consumption in 2003 and 2004, to 1.1 percent between 2011 and 2013, 3.9 percent in 2015 and 2016, and 4.4 percent in 2018 and 2019, official data has shown.

 

DEPA Commercial turnover down 47.8% due to pandemic

Gas company DEPA Commercial has forecast an increase in natural gas volume-based sales of over 20 percent in 2021 following a pandemic-induced total turnover reduction of 47.8 percent last year, down to 396.5 million euros from approximately 760 million euros in 2019.

As a result, DEPA Commercial’s profit after tax in 2020 fell to 37.5 million euros from 67.9 million euros in the previous year.

Despite the reduction, DEPA Commercial offered shareholders – privatization fund TAIPED (65%) and Hellenic Petroleum ELPE (35%) – dividends totaling 6.6 million euros.

The company attributed its turnover drop to international market conditions shaped by the pandemic during the first half of 2020, which suppressed prices at international hubs, creating purchasing opportunities at spot markets, before price levels partially rebounded.

These conditions conduced opportunistic gas orders by major-scale consumers in Greece, who have usually covered a great part of their natural gas needs through DEPA, based on long-term supply contracts, the company explained.

In terms of volume, DEPA’s gas sales in 2020 totaled 25.5 TWh, down 6.7 percent compared to 2019, primarily as a result of the aforementioned factors.