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Economy

Greece Ponders Heating Oil Subsidies, Gas Users Left Out

September 6, 2022

ATHENS – The New Democracy government is said to be looking at adding to subsidies for fuel oil users this winter but not for natural gas where the price has soared out of sight.

With Prime Minister Kyriakos Mitsotakis poised on Sept. 10-11 at the Thessaloniki International Fair to reportedly announce more handouts ahead of the 2023 elections, those will likely include for heating oil, said Kathimerini.

Greece and the European Union are in the midst of an energy crisis with electricity bills doubling and the gas of natural gas rising rapidly in the wake of Russia’s invasion of Ukraine.

Russian energy, which brings in the EU and Greece up to 40 percent of its needs, was exempted from sanctions but President Vladimir Putin has now cut back on the supplies, leaving countries frantic for alternatives.

Finance Minister Christos Staikouras told Alpha Radio that providing more aid for heating oil is on the table although the government has said state coffers are running low from previous subsidies.

That contradicted the Finance Ministry reporting that what’s expected to be record tourism will bring growth exceeding 4 percent during the waning COVID-19 pandemic, the sector seen bringing in 20 billion euros ($19.91 billion.)

“It’s one of the measures being evaluated, if it can be increased,” he said without offering specifics and speaking in vague terms generally used to let a government float a trial balloon without making commitments.

Government spokesman Giannis Oikonomou told SKAI TV that,  “In terms of the heating allowance, every year there is more money and an expanded perimeter, and this year will be no different. We have proven that we understand the demands and needs of the people and we respond to that.”

What needs to be taken into consideration, the government said, is what the price of heating oil will be when it begins being sold on Oct. 15 and if the euro-dollar rate will be favorable, the dollar at parity or lower than the euro now at times.

Heating oil costs are expected to go up far less than natural gas which makes oil users more likely to get assistance that will cost less – the government already paying 94 percent of astronomical electric bills for households.

Providing aid for electricity in households could cost the government up to 800 million euros ($796.35 million) in September, the measure cooling what could be wrath against the government already being assailed by critics and political rivals.

The total cost for that aid, Staikouras said, could surpass 10 billion euros ($9.95 billion) or half of all tourism revenues, and as Greece is trying to reach investment grade ratings for investors

“There is no unlimited fiscal space – it is limited and there is great uncertainty,” he said of how much help the state could offer, the energy crisis ending a pledge to consider lowering the 24 percent Value Added Tax (VAT) on food.

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