Heating oil sales sink but tax revenues rise

Consumption of heating oil dropped 68.7 percent in the period from October 2012 to February 2013 compared with a year earlier, according to data released on Thursday by the Finance Ministry. Nevertheless the state’s revenues from tax on the fuel still rose.

The major increase in the special consumption tax on the commodity that was brought in line with that of diesel in order to combat the illegal trading of heating oil for diesel led many consumers to seek alternative means of heating their homes this winter, which also happened to be among the mildest in living memory in Greece.

Furthermore, the majority of Greeks had bought ample quantities of heating oil last April when plans for the tax hike from October 15, 2012 became known.

In the first five months with the tax on heating oil on a par with that of diesel, consumption amounted to just 739 million liters, against 2,358.6 million liters in the period from October 2011 to February 2012.

In October 2012 consumption amounted to 36.3 million liters against 307.2 million liters in October 2011 – a decline of 88.2 percent. November 2012 saw the consumption of 95.1 million liters, down from 406 million liters in November 2011 – a 76.6 percent drop.

December was the month with the smallest decrease, of only 53.6 percent. It was the month when salary workers and pensioners received their Christmas bonuses, many of them for the last time ever. Consumption amounted to 232.9 million liters, down from 502.1 million liters in December 2011.

In January heating oil sales amounted to 203.3 million liters, against 618.4 million liters in January 2012 – that is 67.1 percent less – while in February the decline came to 67.3 percent, as 171.4 million liters were sold against 524.8 million liters in February 2012.

However, at the same time the increased consumption tax meant that revenues for the public purse grew from 141.5 million euros in winter 2011-12 to 244 million this year.

In the document accompanying the data sent to Parliament, Finance Minister Yannis Stournaras and his deputy Giorgos Mavraganis stated that “it is clear that in the current winter season there has been an increase in revenues from the special consumption tax on heating oil compared to the same period last year despite the reduction in consumption of the fuel, which was due to the reduced demand owing to weather conditions, to stocks and to its high retail price, but also due to the containment of smuggling.”

The ministry is backing its claim to success in the war on the illegal fuel trade with the data for diesel imports in the first couple of months of 2013. They show that the quantity that cleared customs in January and February was 7 percent higher than in the same period in 2013, which illustrates “the switch from heating oil to diesel” according to the ministry.

A total of 3,661 fuel inspections were conducted last year, with 544 people found to have violated regulations. Authorities confirmed 5,658 tax and customs violations and 221 cases of illicit fuel trading. They also found 34 illegal fuel tanks and sent the details of the fines due to the responsible tax and customs authorities for collection.

By March 15, 2013, the government had disbursed 59.2 million euros in heating oil subsidies this year to 346,687 recipients, according to the document Stournaras and Mavraganis submitted to Parliament.

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