ECONOMY

Negative sentiment, smuggling still hurting local fuel market

negative-sentiment-smuggling-still-hurting-local-fuel-market

The fuel market in Greece has continued to shrink over the first couple of months of this year, having diminished by around 30 percent between 2009 and 2015.

After a “tragic January,” according to the market, when gasoline sales posted an unprecedented year-on-year decline of 12 percent and diesel slumped 25 percent, the drop in February is seen at around 5 percent for gasoline and 3 percent for diesel, while heating oil has seen a 20 percent fall, mainly due to the relatively mild winter.

The continued downturn, for a sixth consecutive year, and the fact that legislation to combat fuel smuggling is not enforced and checks at fuel stations for any violations have stopped are creating unbearable pressure on professionals in the sector who abide by the law.

Another problem, in the absence of any checks, has been the competition from businesses across the country’s northern border, as many people living in Komotini, Serres and Alexandroupoli purchase gasoline in Bulgaria, where prices are considerably lower than in the Greek market.

Since the outbreak of the financial crisis, some 2,500 fuel stations have shut down, the stamina of the trading companies has been repeatedly tested and only a few can claim to be in financial health.

Even so, market professionals estimate that it will only take a small improvement in the economy for economic sentiment to improve, with significant benefits for the fuel sector. The president of the Association of Hellenic Fuel Trading Enterprises (SEEPE) and chief executive at Elinoil, Yiannis Aligizakis, attributes the constant decline in gasoline volumes sold to the low mood among consumers owing to the uncertainty the country has experienced in the last year.

“If the bailout review is completed by the creditors in March, the psychology will change. We are also expecting a good tourism season. If the law combating the illegal fuel trade were enforced, sentiment would turn around. This is really just a minor shift away,” argues Aligizakis.

He adds that fuel smuggling continues to distort the market: “A number of steps have been taken to combat fuel smuggling. The final decisions are still outstanding and if they are not taken the whole effort of the last couple of years will have been wasted,” Aligizakis warns.