The additional cost for households from the rate hikes being seen in fossil fuels will run to a projected 200 million euros per month in total.
Unleaded and super unleaded gasoline, diesel, liquefied petroleum gas and heating oil are already looking at price increases ranging between 21% and 38% from last year, while the rates for natural gas have almost doubled compared withe 2020.
If these high rates are maintained for an entire year, the additional cost is estimated to come to around €2.5 billion, and this is not including the additional burden from the rise in electricity rates, and provided that the hikes do not lead to a shrinking in consumption.
That sum is considerable, and its impact is reflected on multiple levels. The first is the reduction of disposable incomes. The second concerns the effect on tax revenues, mainly due to the value-added tax. And the third is the adverse consequence on gross domestic product, as all of that amount will go under imports, which suppress GDP.
For example, the average rate of unleaded gasoline has risen to €1.72 per liter, from €1.42/lt a year earlier. With consumption at some 2 billion liters per year in Greece, the additional cost adds up to some €600 million, plus another €90 million from super unleaded, whose annual consumption comes to some 350 million liters.
The annual consumption of diesel amounts to some 2.7 billion liters. Rates have grown by 28% year-on-year, from €1.13/lt to €1.45/lt, entailing an extra cost of €850 million.
The increase in heating oil is even more dramatic. Its sales are around at 1.1 billion liters per annum and estimates put the starting price when sales begin this Friday at €1.10/lt, up 38% from last October’s rate of €0.80 per liter. This adds another €330 million or so to costs.
How do these figures translate in terms of the additional burden on family budgets? The average need for 1,500 liters of heating oil and 1,000 liters of unleaded gasoline a year entails an additional cost of €750, which is more than half a month’s salary for the average full-time worker. Government subsidies will only cover a part of that.