NEWS

Firms weigh energy costs

The government tried to soothe fears yesterday of the impact soaring oil prices will have on consumers’ pockets, saying that higher energy costs are likely to be partly absorbed by producers, as it steps up efforts to reduce Greece’s thirst for the costly energy source. After a meeting with representatives from food producers and detergent companies yesterday, Development Minister Dimitris Sioufas said that firms in these sectors have indicated that they will not roll over higher petrol costs to consumers in a bid to protect their own corporate interests. «All of them said that in order not to lose their market share, they are trying to absorb the biggest part of the impact from rising petrol prices,» the minister said. According to industry sources, some companies have adopted such a policy due to weak market conditions that have made consumers more fickle. However, other food firms, such as chocolate companies, seem to be less sensitive to consumer demand and have already announced that prices will rise next month. Bread producers offered some good news for consumers yesterday by ruling out higher prices. Government spokesman Theodoros Roussopoulos also said that the price of tickets on public transport will remain steady. Rising energy costs have had a significantly negative effect on household incomes, which have seen their purchasing power continually erode. Economists have flagged the negative impact which rising fuel costs will have on growth and inflation, but are particularly concerned that the higher petrol prices will persist and affect future wage negotiations with employers. In a bid to avert similar problems in the future, the government is currently trying to slake the country’s thirst for petrol by developing other energy sources, a time-consuming procedure. «There are efforts being made on behalf of the government to promote alternative forms of energy,» Roussopoulos said. He pointed to Greece’s growing natural gas network as helping households cut heating costs.