Fuel tax cut would spark illicit trade, says sector expert

The prospect of a reduction on the special consumption tax on heating fuel, by between 15 and 20 percent, as is being examined by the government, would spark illicit trade, a sector authority has warned.

A government move, in 2012, to raise heating fuel tax to the level imposed on auto fuel helped confront illicit fuel trade, as the initiative prompted “a return to auto fuel following a reliance, in recent years, on [lower-taxed] illicitly traded heating fuel,” the official, Yiannis Aligizakis, managing director at the petroleum firm ELINOIL and vice president of SEEPE, the country’s petroleum trading association, told Kathimerini.

Aligizakis estimated illicit fuel trading activity in Greece to be worth between 450 and 500 million euros a year.

Although a heating fuel tax reduction would serve the interests of both consumers and sector firms, it would “leave the road for smugglers wide open,” he noted.