ECONOMY

One in four heating oil trading firms have shut down

A quarter of Greek companies supplying heating oil have closed since mid-October due to a lack of demand, Kathimerini has learned.

Orders have been almost zero for heating oil in Attica since the start of trading while in northern Greece demand dropped between 80 and 90 percent in the October 15-31 period compared to the same time last year.

Trading companies and gas stations expect demand this and next month to show an annual drop of 50-60 percent given the rise in the special consumption tax on heating oil and relatively good weather. This decline is set to put between 40 and 50 percent of heating oil trading enterprises out of business, and have a knock-on effect on fuel companies and refineries.

Unseasonably high temperatures and the higher price of heating oil arising from the tax hike have frozen orders by consumers who had not acquired a surplus last April, when it was announced that the tax hike would come into effect as of October. The fuel market has already lost 30 percent of its turnover in the last three years as household budgets are stretched to their limit.

The general secretary of the Panhellenic Federation of Fuel Station Owners and Traders (POPEK), Vangelis Cotsos, said that in the first 15 days of sales of heating oil for this winter, starting October 15, some 25 percent of traders have shut down. These are gas stations and companies that fulfilled heating oil orders and traded limited volumes of fuel, which last month realized they would not survive the winter given the sharp drop in demand.

Cotsos added that out of the 7,000 heating oil traders some 3,000-3,500 will be out out of market for lack of demand and cash flow this season, while the general secretary of the Association of Fuel Trading Enterprises, Yiannis Aligizakis, said that in October all of its members posted losses from heating oil sales. He said there were virtually no orders in Attica, while demand in northern Greece was 80 percent down compared to October 2011.

On the upside, the drop in global oil prices has reduced the retail rate to 1.30-1.35 euros, against original estimates of 1.40-1.60 euros per liter.