Heating fuel blues

New heating fuel prices kick into effect today, boosted by the sharp rise in international oil prices to levels that are well over a third higher than last winter’s. According to figures released by the Development Ministry – which has engaged representatives of refineries, fuel traders and petrol station owners in talks on curbing the rise in fuel prices – heating oil is expected to sell for between 45 and 48 cents per liter. This represents a 35-40 percent hike over last year’s average price of 33 cents per liter. Ministry calculations show that an average Greek family will have to spend some 5 percent of its total income on heating this winter, up from 3.5 percent last year. Most Greek households use central heating systems that work with heating oil, although natural gas is slowly picking up in popularity. This places the government under pressure to ensure that prices are as low as possible, although last week’s meeting between Development Minister Dimitris Sioufas and fuel sector officials failed to secure any major concessions. Sources in the fuel sector told Kathimerini that it was up to the government, rather than to private entrepreneurs, to finance social policy of this sort. «We are not charitable institutions, we have our shareholders to think of,» one official said. The government has resisted calls to provide low-income earners and pensioners with special fuel subsidies, without quite ruling out the idea. Such a measure was last adopted in 2000, when 2 million less well-off Greeks – mostly pensioners, large families and the long-term unemployed – were given subsidies of 30,000-50,000 drachmas (88-147 euros) to compensate for higher fuel prices. That cost the state coffers a total of 250 million euros. «When we decide on specific measures, we will announce them,» a government source told Kathimerini. Another possible course of action for the government would be to reduce value-added tax on heating fuel. However, it is highly uncertain whether the government would be able to ensure that this would end up to the advantage of consumers, rather than lining the pockets of unscrupulous fuel traders.