Greece has one of the world’s six high­est un­leaded gaso­line rates

Kathimerini English - - Focus - BY THANOS TSIROS

Soar­ing fuel prices in Greece have put the coun­try in the un­en­vi­able po­si­tion of be­ing among the six most ex­pen­sive in the world for un­leaded gaso­line, and are set to have mul­ti­ple con­se­quences on the en­tire pro­duc­tion chain. The lat­est tax as­sault on fuel con­sump­tion has also placed it among the 15 most ex­pen­sive coun­tries in the world when it comes to diesel.

In fact, since last week, Greek is­lan­ders have found them­selves in an even worse po­si­tion, as a liter of un­leaded gaso­line costs them up to 1.93 eu­ros, a rate that you won’t even see at the pumps in the world’s most ex­pen­sive coun­try, Hong Kong.

The Fi­nance Min­istry ex­pects this lat­est fuel tax in­crease to bring in an ad­di­tional 670 mil­lion eu­ros in 2017, com­pared to 2016. How­ever, the drop in con­sump­tion has been con­stant since the start of the bailout process in 2010, with un­leaded gaso­line sales shed­ding more than 1 bil­lion liters on an an­nual ba­sis.

Pub­lic rev­enues will also be af­fected by the con­tin­u­ing swing to­ward diesel. The min­istry is try­ing to make up for those losses by in­creas­ing the spe­cial con- sump­tion tax on diesel (10 cents per liter) by more than for un­leaded gaso­line (4 cents/lt).

How­ever, ev­ery liter of diesel that is pur­chased in­stead of un­leaded gas en­tails a loss of 34 cents for the pub­lic cof­fers, as the state makes about 1 euro from ev­ery liter of un­leaded (some two-thirds of the re­tail price), but just 66 cents for each liter of diesel, or 53 per­cent of the re­tail price.

The 2016 fi­nan­cial year is clos­ing without the state hav­ing met the fuel tax col­lec­tion tar­gets set by the min­istry, even though there was a dou­ble tax im­pact in June: The value-added tax rate rose from 23 to 24 per­cent, and sev­eral is­lands saw their tax dis­count waived, tak­ing their VAT rate from 19 to 24 per­cent.

Con­se­quently 2016 will close with a re­duc­tion in fuel tax tak­ings com­pared to 2015. Rev­enues from the spe­cial con­sump­tion tax will at best be 51 mil­lion eu­ros lower (at 4.124 bil­lion eu­ros from 4.175 bil­lion in 2015) and VAT on fuel will fetch 160 mil­lion eu­ros less (1.594 bil­lion against 1.754 bil­lion eu­ros in 2015). That will be the sec­ond year that the gov­ern­ment’s tar­gets for fuel tax rev­enues have not been met.

Gaso­line prices on cer­tain Aegean is­lands have climbed to the high­est point in the world, up to 1.93 eu­ros per liter.

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