Greece to subsidise heating oil at the pump and raise heating allowance 30% from 14 October

The announcement

Finance Minister Kyriakos Pierrakakis announced on Tuesday, 13 October, a double intervention on heating oil: a subsidy at the pump and a 30% increase in the heating allowance compared with last year. He said the measure affects "hundreds of thousands of families" across the country. The details are to be specified on Wednesday, 14 October, by Environment and Energy Minister Stavros Papastavrou and Deputy Finance Minister Thanos Petralias.

“We cannot stop an international energy crisis. But we can make sure citizens do not carry its burden alone, and we will be by their side for as long as it is needed.”

Price target and options under discussion

The government's target is a heating oil price below 1.75 euros per litre, the level it had closed at last year, as Prime Minister Kyriakos Mitsotakis has promised. Press reports describe three scenarios under discussion. In the first, the price would fall to 1.71 euros, with an extra subsidy of 25 cents, 15 cents from the state budget and 10 cents from refineries. In the second, the price would fall to 1.61 euros, with an extra 35 cents, 25 cents from the state and 10 cents from refineries. Reports also say the refineries are locking in a discount of about 20 cents per litre on heating oil at the pump, while the government's final decisions had not yet been taken.

Heating allowance

According to NEWS 24/7, the economic staff chose the 30% increase scenario. The minimum allowance would be 130 euros and the maximum 1,040 euros. In mountainous areas the amounts could reach 1,300 euros or even 1,560 euros, depending on the climate coefficient. Environment Minister Stavros Papastavrou said the allowance covers about 1,170,000 households across different forms of heating.

Refineries and fuel discounts

Reports say Motor Oil and HELLENiQ ENERGY will subsidise heating oil through their refineries. Their discount on diesel for motor vehicles, 5 cents per litre, is expected to continue. Reports indicate the 10-cent discount on unleaded petrol will not be extended, as the refineries judge their interventions in heating oil and diesel more necessary. Deputy Prime Minister Kostis Hatzidakis said the government expects a third intervention from the refineries, and that the subsidies on motor diesel and petrol will continue.

Wider context

Hatzidakis said the final consumer price of heating oil would be set on 15 October, at the start of the period, well below 1.75 euros per litre. He said the refineries had contributed more than 100 million euros since July, and that Greece had taxed windfall profits of power companies and, twice, of refineries. Papastavrou said Greece, together with Spain and Sweden, had made the largest support intervention in energy relative to GDP among the three countries he named.