Galery

1

A fight of the titans on the Greek fuel market after the Ministry of Development and Competition has decided to put a ceiling on the price of gasoline in 13 municipalities in Greece. After the bitter experience of the Socialists in 2010 to control the constant growth of fuel prices by limiting the retail prices this year they have decided to dig into the pockets of the big players – the companies responsible for the transport and distribution of fuels.

After analyzing the market the Department of Trade has found that wholesalers have speculatively increased the prices of fuel in five island municipalities, which led to the limitation. "The revision showed that the transport prices of fuel to the islands of Chios, Samos, Retimnis and Dodecanese set by the transport companies significantly burden the end price for gasoline stations." The Ministry has found out that the differences between the expected and speculative profits vary between 2.5 and 5.7 euro cents per litre of fuel. As an annual turnover this difference means burdening the consumer prices with millions of euros.

This is the first limitation of the wholesale prices in Greece. A government source told GRReproter that the Ministry has taken this decision, but the matter has not been yet discussed with the major fuel supplying corporations. Asked "Do you think the suppliers will comply with the ceiling of the wholesale price of gasoline?" the government official replied that he could not answer in regard with their position. "Whatever their response, they will have to comply with the law," said the representative of the Ministry of Development and Competition not particularly convincing.

The issues of gasoline prices in Greece have lasted for many years and that is why local analysts that follow the development of the fuel market believe that the price ceiling is not a solution. There should be stricter, more frequent and more effective control. The development of the special web site www.fuelprices.gr, which will show the fuel prices of gasoline stations by regions, was assessed positively. Moreover, an sms service to inform the citizens about the cheapest gasoline stations by municipalities will be active next week. The drivers can send a free message to number 54151 to receive the addresses and the prices of the three cheapest gasoline stations in the area of their interest. Currently, 3,700 gasoline stations in the country provide daily information on the prices level of the fuels they offer, and the Ministry expects all retailers in the sector to join the initiative by the end of the year.

"Setting a maximum price of fuels is an extreme measure, which we hope to alarm the traders to comply with the market conditions. We hope that we could quickly cancel the price ceiling. However, we would not hesitate to extend the restriction for an indefinite period of time, if the recommendations of the government are not complied with and the speculative practices continue," said the Minister of Development and Competitiveness Michalis Chrysohoidis. The union of the fuel supplying companies did not comment on the government's decision to limit the level of their profits in the five municipalities. A representative of the union said that a general meeting will be held later in the day and their particular position will be announced after it.

Greece has experienced dry stations once, when the nearly two-month strikes of tanker drivers blocked the country in the summer of 2010, but the hopes are that there will not be so extreme reactions this time.

The first serious response the Government got was by the union of gasoline stations owners. They stated from the headquarters of the union that the government made electoral adjustments that do not meet the market needs and apply the law partially. They refer to paragraph 20 of Law 3054/2002 for the pricing of fuels, according to which when setting a price ceiling state authorities should consider all participants in the supply chain - refineries, manufacturers, importers, wholesalers and retailers.
 
Law 3054/2002 states that in the first stage in imposing a limit on the maximum price of fuel, refiners should reduce the price of the fuel they offer to the level of the price of the imported fuel when the importers offer lower prices than local producers. If the price of imported fuel is higher than the price of domestic production, then the base of the ceiling is the price offered by local refineries. The decision of the Ministry of Development and Competition, however, excludes the refineries from the control measure and therefore the union defines the ceiling on fuel prices as hypocrisy and throwing dust into society’s eyes