Heating oil tax plans fuel concern

Gas station owners expressed concern yesterday at news that the government is considering hiking the tax on heating oil to make it the same as that on other forms of fuel, a measure that would also lead to households’ heating bills doubling. The government has been forced to think about bringing the taxes on the different forms of fuel into line with each other as a result of its postponing plans to move hundreds of products from the 11 percent value-added tax bracket to the 23 percent one. The memorandum signed by Greece, the European Union and the International Monetary Fund calls for the government to increase the VAT on 30 percent of the products and services in the lower bracket by next year. The Finance Ministry had thought about adopting the measure this fall but has been put off by the opposition of business groups, who fear it would lead to a drop in sales. However, the government is desperate to find ways of increasing state revenues and the adjustment in heating oil tax seems a likely alternative. The head of the Federation of Gasoline Station Owners (OBE), Michalis Kiousis, said yesterday that such a development would threaten the future of 55,000 gas stations in the countryside, as their main source of income is from selling heating oil. Kiousis believes that an increase in the tax on this fuel would lead to homeowners turning to natural gas, air-conditioning systems or electric heaters instead. Kiousis added that many customers, particularly in Attica, buy heating oil on credit and that it would become extremely difficult for gas stations to keep offering this service if the price of the fuel doubles. The tax rise would see consumers pay roughly 1.10 euros per liter rather then the 0.55 they paid last year. It takes about 200 liters of heating fuel to heat an average 80-square-meter apartment during the winter. Last year, that would have cost roughly 120 euros. If the tax is increased, it will cost about 240 euros. Although the government is considering rebates for low-income groups, the measure is likely to prove deeply unpopular if enforced.