Heating oil is proving a divisive issue in the government, with the latest rift being caused by Alternate Finance Minister Christos Staikouras apparently asking the troika to allow Greece to reduce the tax on this particular fuel without first consulting with his superior, Finance Minister Yannis Stournaras.
Sources said that Staikouras wrote to the troika to ask for a 15 percent reduction in heating oil tax, a year after it was raised to the same level as vehicle fuel primarily to tackle smuggling. The tax cut would reduce the price of heating oil by about 3 or 4 cents. The special consumption tax is currently at 300 euros for each 1,000 liters.
The alternate minister also asked for a 7 percent increase in the number of people eligible for a heating oil benefit and for the subsidy to increase from 0.28 cents per liter to 0.34 euros.
Stournaras only found out about Staikouras’s request on Monday and immediately voiced his objections. He argued that reducing the tax on heating oil would create two different levies for fuel and open up possibilities for black marketeers.
Sources said that Staikouras responded by arguing that the government had lost about 500 million euros in revenues as a result of the rise in heating oil tax, far outweighing the benefits of minimizing fuel smuggling.