ATHENS – With Greek households feeling the double whammy of rising energy costs exacerbated by Russia’s invasion of Ukraine, Prime Minister Kyriakos Mitsotakis’ government is mulling whether to provide aid as well over jumping gasoline prices.
The cost of a liter of gas has risen to about 2.07 euros ($2.27) per liter, which translates to about $8.58 per gallon – twice that in the United States which has set off a furor there.
In more remote Greek areas, said Kathimerin, the price per liter is around 2.50 euros, or about $10.35 a gallon, although cars in Europe tend to be smaller and travel distances within countries less than across the US.
Still, the amount could be a disincentive for domestic tourism with worry that the European Union sanctions on Russia, including barring Russian airlines, will see far fewer Russians in Greece and that fuel costs could also limit international air travel for many.
Those factors have led the New Democracy government to consider a gasoline subsidy in another support poackage for households and businesses during the lingering COVID-19 pandemic, the paper said.
But faced with spending so much on so many fronts, the government is said to be looking are more targeted rather than blanket relief which means there wouldn’t be an across-the-board tax cut, but measures to help the most vulmerable. It wasn’t said how that would affect people buying gasoline.
Mitsotakis insisted “we have to intervene in smart and not horizontal ways,” and a government source not named told the paper that the plan – to be worked out – would be to help those who need it.
“We don’t want someone driving a Cayenne in Ekali or a Ferrari in Glyfada to benefit,” the source said, referring to two affluent Athens suburbs but without adding if that meant drivers of high-end cars would be excluded.
Finance Minister Christos Staikouras told SKAI TV that,“We have an idea of how much households are burdened and we are trying to find and exhaust the fiscal space and there will probably be other measures and other interventions,” after he earlier said there wouldn’t.
The government also intends to maintain reduced Value-Added Tax on food – up to 24 percent – and drinks services and on transport in the second half of the year, which will cost an additional 250 million euros ($273.39 million.)
All that comes as Mitsotakis said his government would end a solidarity tax that took money out of paychecks of workers to give to lower-income groups as a kind of welfare benefit, and with plans to reduce social security contributions, at a cost of some 2.1 billion euros ($2.3 billion) annually.
While supporting EU sanctions on Russia, Mitsotakis said it shouldn’t go as far as banning Russian gas imports – which account for 40 percent of that country’s Gross Domestic Product (GDP) and give President Vladimir Putin a lifeline.
Greece, Mitsotakis noted, has a “very important role to play” in finding alternative gas suppliers, both as a gateway for liquified natural gas (LNG) imports and as a country with deposits in the southeastern Mediterranean. He noted that Greek shipowners, who are essentially tax free and contribute next to nothing to their country, are key because they control more than 20 percent of the LNG transport fleet worldwide,” with their vessels.