Greek authorities and the local energy market are expressing concerns about the likely rise in fuel prices in the domestic market following the standoff between the US and Iran, which has affected global oil rates.
Although the impact on rates has been limited and manageable so far, the fact that this has coincided with Greece’s adjustment to the European directive on the further increase of the quantity of bioethanol in gasoline has rendered hikes in consumer prices inevitable.
The adjustment to the directive led to an overnight rise in gasoline prices by 2.5 cents per liter from December 31 to January 1. The total impact of the rise in global oil rates earlier this week is estimated at 4 cents per liter, which will have been passed on to consumers by Friday evening.
How prices change will depend on conditions in the global market and developments in the Middle East. Market professionals estimate that, for now, the situation with domestic fuel prices is manageable; they argue that the hikes from the bioethanol increase were expected and reiterate their demand for a reduction in fuel taxation, saying it is the only measure that could lead to a decline in prices in case of a fresh hike due to global concerns. On Tuesday gasoline rates averaged 1.62 euros per liter while heating oil was 1.08 euros/lt.
The market associates the low demand for fuel with high taxation: Demand for heating oil in December – despite the cold weather – was down from December 2018. Unofficial market data showed that demand for gasoline and heating oil declined slightly in 2019, while demand for diesel increased by 3 percent year-on-year.
Meanwhile the price of shipping fuel will increase 20 percent, mainly due to the new rule which imposes a 0.5 percent cap on sulfur, putting pressure on coastal shippers.