Playing money games with heating fuel

Greeks will be paying between 32-37 percent more for heating fuel this year. Added to the 40 percent increase last year, the final increase will total 70 percent over two years, a major drain on already-strained household budgets, particularly among lower-income groups. Alternative sources of fuel are non-existent for most consumers. Only in three regions – Attica, Thessaloniki and Thessaly – is there restricted access to natural gas. Meanwhile, meteorologists have predicted a cold winter. Apart from the cold and high fuel prices, consumers will also have to deal with profiteers aiming to maximize their profits by making use of legal loopholes. The distribution of a 3.5-million-metric ton (MT) load of fuel, which is approximately the annual domestic consumption of heating fuel, requires the direct involvement of over 22 trading firms, about 8,000 gasoline stations and 1,500 vendors, comprising an enormous turnover of over 2.5 billion euros. Recent complaints to the Development Ministry and strikes within the sector indicate that trouble is brewing. But it is the administrators of apartment buildings who have been in the news most recently. Their already-thankless task will be further burdened by the responsibility of carrying out a government plan to fight illegal fuel supplies and tax evasion. Last spring, the Economy and Development ministries promised to establish a new way of distributing heating fuel aimed at stamping out illegal supplies. The system of making heating oil available at a lower consumer tax rate between mid-October and the end of the following April provides plenty of opportunity for people to buy heating fuel and sell it as diesel fuel in order to profit from the difference in tax, which is the state’s loss. That this occurs is evident from official figures which show that every year far greater quantities of heating oil are sold in April than in January, as people buy up supplies in advance of the following winter. A survey by the Finance Ministry police (SDOE) showed that during the period that heating fuel is available, consumption of diesel falls to levels that indicate it is being replaced by heating fuel. The monthly consumption of diesel in the summer months is, on average, about 220,000MT. Any apparent reduction in this quantity is due, according to SDOE, to it being replaced by heating fuel. Consumption indicators for diesel rise during September, October and November to over 220,000MT, dropping over the next three months down to 150,000MT. The government’s original plan, approved by the Cabinet, provided for the same tax on diesel and heating fuel. However, the plan faltered after no mechanism could be found to return tax to consumers. With the goal of fighting tax evasion – and improving public finances and the petroleum products market – the government worked out a second plan, this time focusing on building administrators, who must supply their taxation number (AFM) when ordering the building’s heating fuel supply. The administrator would then have to submit all receipts to the tax office along with his or her own personal taxation statement for cross-referencing with the supplier’s records, which would certainly be a major step toward fighting tax evasion. But as soon as the plan was announced, it became clear that it would be impossible to implement. According to a circular issued over a week ago by the Finance Ministry, building administrators’ only obligation would be to submit their own AFM. The circular does not provide for any means of cross-checking data and no way of checking tax evasion. According to market sources, there is nothing to stop a sales outlet from issuing false invoices bearing the AFM of any building administrator on his books. The Economy Ministry abolished the original plan for cross-referencing when they later realised the post of «building administrator» is not a job but a voluntary service. That is, they found that a building administrator cannot be obliged to undergo the process of submitting papers to the tax office. So illegal fuel dealings will still go undetected. Government sources themselves say that a major opportunity has been missed to eradicate tax evasion and boost state revenues, which could be put to good use in other sectors. Meanwhile, heating fuel consumption in Greece continues to be higher than in Scandinavian countries.