ECONOMY

Probe ordered into retail fuel prices

Fuel prices across the country may have dropped to the lowest level in recent years, but an Athens prosecutor launched an investigation on Wednesday to check the extent to which price reductions in Greece follow the course of global oil prices and to look for instances of profiteering.

According to the Development Ministry, which monitors global oil rates and local retail prices on a daily basis, fluctuations in the domestic market do come as a result of developments in international refinery rates that are based on the course of refining rates for fuel in the Mediterranean region.

The ministry’s data show that the reduction in the rate of crude oil has had an impact but not a direct influence on the trading price of gasoline in the Mediterranean according to which refineries buy their commodities, while the decline in the exchange rate of the euro against the dollar has contained the price drop.

As a result the price drop of 20.43 percent in US dollars recorded in recent weeks in the global rate of crude oil has led to the gasoline price level in the Mediterranean falling by 6.06 percent in euros. The rate in the Mediterranean is also affected by supply and demand in the regional market.

Refinery rates also factor in the exchange rate of the euro against the dollar as well as the cost of maintaining security reserves and the gross profit margin of refineries that amounts to 0.5 percent of the retail price.

In Greece 62.75 percent of the retail price corresponds to taxes and levies (special consumption tax on fuel, value-added tax, levy for the Regulatory Authority for Energy etc) that are not affected by the international refinery prices, which account for 30.03 percent of the final rate. The remaining 7.22 percent corresponds to the gross distribution cost in the wholesale and retail market. Therefore the 20.43 percent crude oil rate drop in dollars amounts to a pretax drop in retail prices in Greece of 5.94 percent.

On Wednesday the retail price of gasoline in Greece averaged at 1.546 euros per liter, having shed 2.77 percent since November 1, 2014.