ECONOMY

Gov’t admits heating oil failure

Alternate Finance Minister Christos Staikouras admitted in a written statement on Wednesday that the harmonization of the special consumption tax on heating oil with that on fuel for vehicles has proven to be financially ineffective and socially unjust.

The measure, adopted in November 2011, has not led to an increase in state revenues or succeeded in combating illegal trade, the statement added, but has added to the burden on lower-income groups as well as environmental pollution.

Staikouras clarified that with the 30 percent reduction in the special consumption tax, as announced by Prime Minister Antonis Samaras in Thessaloniki last Saturday, along with the heating oil allowance which will continue to be distributed this year, the average price of heating oil for consumers will amount to no more than 0.80 euros per liter. That will be 23.4 percent less than the price in April 2012, which had averaged 1.045 euros/lt.

For those not entitled to an allowance, the average retail price of heating oil will come to 1.150 euros, compared with 1.259 euros in April 2014. With the start of heating oil sales scheduled for October 15, the responsible ministries will increase checks so as to ensure “that the reduction of the tax will benefit consumers and not anyone wishing to take advantage of it.”

Staikouras also referred to the government’s decision last year to broaden the criteria for allowance eligibility and the increase of the benefit to 25 percent of the subsidy per liter, amounting to 0.35 euros/lt. Therefore the allowance distributed last winter amounts to 175 million euros, compared with 86 million in the winter of 2012-13, the first when the allowance was handed out. That measure contributed significantly, the minister noted, to the 12.9 percent increase in heating oil consumption last winter compared with the October 2012 to April 2013 period.

The government will also insist on the coordination of competent ministries for the full application of the system that monitors fuel flow at gasoline stations, and continue its efforts to end the illegal fuel trade.