Oil to blame for good chunk of inflation

Greek core inflation (which does not take into account the effect of oil prices) is on a par with eurozone levels, thanks to government policies, ministers claimed yesterday. Development Minister Dimitris Sioufas and his deputy, Yiannis Papathanassiou, noted that the difference between Greek inflation and the eurozone average fell from 1.7 percent in September 2003 to 1.4 percent two years later. The impact of fuels on Greek inflation is at least twice as strong as in the rest of the eurozone, as Greece spends about 4 percent of its gross domestic product on imported fuels, against a 1.5 percent eurozone average. After a record impact of fuel prices in September (1.35 percent against 0.51 in the same month of 2004 and zero in September 2003), Greece’s 12-month average inflation came to 3.4 percent, which is the same as two years ago and lower than one year ago (3.6 percent), the ministers said. The Greek Consumer Price Index stood 3.9 percent higher in September than a year earlier and would have been 2.5 percent higher without the effect of oil prices, the ministers said. Gasoline station owners yesterday appealed to the government to take urgent measures to cleanse the petroleum products retail market, alleging that phenomena of fuel adulteration and illegal distribution have become rife. Speaking at a press conference, the president of the Association of Gasoline Station Retailers, Dimitris Makryvelios, complained that the Finance Ministry’s recent measures «offered nothing toward quashing the phenomenon.» In an effort to prevent the sale of lower-taxed heating fuel as automotive diesel, which is a source of extensive tax evasion, the government decreed last week that all buyers of heating fuel would have to provide their tax registration number. Makryvelios said this measure would create additional problems without solving anything. He urged the government to reinstate a provision enabling distributors, who have launched protests, to sell automotive diesel besides heating fuel. But he also charged them with forcing tanker drivers into duping consumers by linking their pay with delivering quantities lower than nominal ones.