Greece Considers Diesel Subsidy Reinstatement Amid Fuel Price Surge

The Greek government is facing a new challenge as fuel prices near €2 per liter and electricity wholesale prices increase by 24% in July. The geopolitical turmoil in the Middle East has led to higher oil and natural gas prices, affecting domestic markets.

The biggest concern is diesel, which is spread across transportation and production costs throughout the economy. To address this issue, the government is considering reinstating a diesel fuel subsidy at the pump.

Despite current subsidies of 10- and 5-cents per liter applied by refineries from July 14 to August 31, prices in popular tourism destinations have already exceeded €2 per liter.

The electricity price increase is also significant, with a 24% jump in wholesale prices per megawatt-hour in July. This may lead to higher charges for consumers under green and yellow floating tariffs in August.

Deputy Prime Minister Kostis Hatzidakis has stated that resources are available to finance additional measures, citing €800 million allocated since the beginning of the year and an additional €200 million set aside.