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Greece’s budget to include new oil price hikes November 13, 2007

Posted by grhomeboy in Business & Economy.
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The Economy Ministry is counting the impact of soaring international oil prices on the local economy, particularly inflation and growth, in order to incorporate them in the budget draft to be tabled in Parliament next week.

The estimates of the economy’s key indicators included in the original budget draft were based on the assumption that the average price of oil would be $71.9 per barrel, as projected by the European Central Bank in September. Now the budget will adopt the latest estimate of the European Commission, which in its fall forecast sees the average price of oil higher by 9.5 percent, at $78.7 per barrel. The first consequence of the upward revision of oil prices is the new estimate for the course of inflation: The original forecast had been for 2.7 percent this year to drop to 2.6 percent in 2008. Now the budget will suggest that both this year and next inflation will be running at 2.8 percent at least. Estimates of growth remain unchanged for the time being at 4.1 percent this year and 4.0 percent in 2008, despite the fact that the Commission expects it to decline to 3.8 percent. The Economy Ministry believes that once again, as in recent years, Brussels’s growth forecasts will prove too conservative.

The Ministry acknowledges that high oil prices put pressure on the budget despite the strength of the euro, which absorbs some of the impact. Worries focus on possible inflation expectations which could have an adverse impact on revenue policies, while also creating further pressure for heating oil allowances.

Next year the government will have to enter tough negotiations on salary rises with all public servants including utility workers, as their two-year labor contract expires at the end of the year. The only positive aspect is that the government can expect an increase of 120-150 million euros in value-added tax revenues from fuel.

Greeks in Russia for energy talks November 9, 2007

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Minister in Moscow discussing oil pipeline and natural gas supply, ahead of PM Karamanlis’s visit

Development Minister Christos Folias has been in Moscow since yesterday to pave the way for an official visit by Prime Minister Costas Karamanlis next month and to revive the recently stagnated process for the Burgas-Alexandroupolis oil pipeline.

The agenda of the Minister’s two-day visit includes meetings with his Russian counterpart and representatives of the country’s oil and natural gas industries and to discuss all issues related to the course of the construction of the oil pipeline and the transmission of natural gas from Russia to Western Europe through Greece.

There are significant delays in the implementation of the construction of the oil pipeline linking the Bulgarian Black Sea port of Burgas with the Greek port of Alexandroupolis on the Aegean Sea. The delays are mostly attributed to the Russian side.

The project gained momentum in the last few years when it secured the backing of the Russian government, as expressed by the presence of President Vladimir Putin in Athens for the signature ceremony of the three-party interstate agreement. However, there are now obstacles that have been created by the attitude of the Russian oil industry. Russian company representatives who participate in the project told their Greek and Bulgarian partners at their last meeting that they should secure their own oil supply corresponding to their percentage of ownership of the pipeline.

The attitude of the Russians left the other two sides astounded and disappointed; they argue that this was not provided by the interstate agreement in which the three countries have been committed to the project on political level.

In Moscow, the Greek Minister will also discuss the issue of extending the interstate agreement for the supply of natural gas from Russia to the Public Gas Corporation (DEPA). The agreement expires in 2016 and the two sides are discussing a possible extension until 2040, as well as an increase in annual quantities by about 80 percent.

Discussions will also focus on the new pipelines for the transmission of natural gas from Russia to Western Europe, passing through Greece. Of particular interest for the Russian side is the new pipeline linking Turkey and Greece that is to be inaugurated by the two countries’ Prime Ministers on Sunday, November 18. The ceremony on the Evros River, on the Greek-Turkish border, will include the first transmission of natural gas from Turkey to Greece.

The 285-kilometer pipeline forms part of the so-called horizontal axis for the supply of Europe with 11 billion cubic meters of natural gas per year from the rich reserves of the Caspian Sea. The pipeline links Karacabey in Turkey with Komotini in Greece.

Greek inflation rate rises to 14-month high on oil November 9, 2007

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Greece’s inflation rate rose in October to the highest in 14 months on fuel-price increases.

The country’s annual consumer price inflation accelerated to 3.1 percent in October from 2.9 percent the previous month, the National Statistics Service said today in a statement handed out to reporters in Athens.

That’s its highest level since August 2006. Gasoline prices contributed most to the increase, rising 13 percent from the previous year, according to the statement. Rising oil prices weigh more on inflation in Greece than in the rest of the euro area because the country is more dependent on oil products to cover its transport and energy needs.

Under a harmonized European Union measure, inflation accelerated to an annual 3 percent from 2.9 percent in September, the statement said. That’s the highest since February.

Fuel sales continue to increase in Greece October 30, 2007

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Sales of gasoline and diesel in Greece grew by 5.6 percent year-on-year in the January to August period, according to a survey by Stat Bank published yesterday.

Gasoline sales expanded by 3.8 percent from 2.67 million tons in 2006 to 2.77 million tons this year, while the diesel market grew by an impressive 466.6 percent. Only the market of heating oil showed a 15.4 percent decline in that period, given its rising price and the mild winter of 2006-2007. The annual turnover of the market is estimated at 12 billion euros.

Greece still a thirsty oil consumer October 26, 2007

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Greece remains a country that is highly dependent on oil, to a far greater extent than any other EU country, as shown by official Development Ministry data on the country’s energy needs.

Net oil imports in Greece account for 65.2 percent of gross energy consumption, compared to a eurozone average of 44 percent and just 32.9 percent in the EU-15. As much as 57 percent of energy demand in Greece is met by oil consumption.

According to Eurostat data, energy consumption in Greece per real GDP unit remained unchanged between 1991 and 2002, while a drop of 15 percent and 9 percent was recorded during the same period in the EU-15 and eurozone respectively. Currently, the energy efficiency index in Greece is at 66.1 percent against the European average of 71.3 percent, which ranks Greece in the fourth-to-last position.

Natural gas was first introduced in 1995 and renewable energy sources began to be measured as electricity generation sources in the late 1990s.

The transport industry in 2005 represented 39 percent of final energy consumption, having risen 37 percent compared to 1990 levels. Also in 2005, the overall consumption by the tertiary, household, state and private sectors stood at 41 percent, compared to 32 percent in 1990.

The industry in recent years has been a more stable energy consumer, with 4.1 metric tons of oil equivalent (Mtoe) in 2005, or up 0.2 Mtoe (5 percent) compared to 1990.

Crude and oil products are imported into Greece primarily from Russia (32.3 percent), followed by Saudi Arabia (31.1 percent) and Iran (28.6 percent). At the same time, however, significant exports of oil products are made to the USA, Turkey, Libya and Syria. In 2005, total oil product exports rose to 4.8 million tons.

As far as natural gas is concerned, overall demand is met by imports from Russia (85 percent) via Bulgaria, and by liquefied natural gas (LNG) from Algeria (15 percent). In 2005 and 2006, natural gas imports totaled 2.8 billion cubic meters and 3.1 billion m3.

Petrol sold lags in quality and quantity October 25, 2007

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Eight out of 10 gas station owners have been found to be tampering with petrol pumps.

The quality of fuel in Greece remains dubious, a new survey by the Fuel and Lubricants Technology Laboratory of the National Technical University of Athens shows.

Titled “Quality of Fuel in Greece – Current Situation and Development through Time” the survey tested 599 samples from 16 companies and 402 gas stations in Athens, Thessaloniki, Patras and Iraklion.

The instances of “problematic diesel samples” were seven times more than last year (10.3 percent in 2007 against 1.5 percent in 2006). Extreme samples including more sulfur than allowed occurred in 4.7 percent of samples, against none last year.

“This year we have collected the worst diesel samples, which included sulfur at 70 times above standards; it was actually from one of the major companies, too,” said Professor Stamos Stournas, the head of the laboratory, who presented the survey yesterday.

Researchers also found that the adulteration of unleaded and super-unleaded gasoline has grown considerably from last year: Adulterated samples of unleaded gasoline increased from 1.1 percent to 8.3 percent and those of super-unleaded from 2.8 percent to 4.6 percent.

The survey was also commissioned by the Association of Oil Trading Companies in Greece (SEEPE), which objected to the findings showing that eight out of 10 gas stations rob consumers at filling points. The laboratory used a new method to make the calculation of fuel sold, based on mass and not volume because “mass is 1,000 times more precise,” according to Stournas.

“Conservative estimates show that Greek consumers pay for 50 million liters of gasoline that they never get, with about 30 million of them evaporating,” added Stournas. SEPEE General Director Andreas Petrianidis called for more checks at gas stations.

Gas stations to pay tax on heating fuel October 15, 2007

Posted by grhomeboy in Business & Economy, Energy.
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The Greek government seems to prefer the solution of the gas stations paying tax from this January as far as the leveling of taxation for diesel and heating oil is concerned. As of today heating oil will be available for sale without including an increase in tax.

According to the plan studied by Deputy Finance Minister Antonis Bezas, gas station owners will undertake the supply of heating oil at the price of about 0.62 euros per liter, having bought it much more expensively from trading companies. The relevant bill will be submitted to Parliament by the end of the year.

In practice, everyone in the supply chain buying heating oil will pay fuel tax of 293 per thousand liters from January 1, 2008, while consumers will only pay 21 per thousand liters. Gas station owners will receive the difference in tax from the state on the same day or up to three days later by submitting their documents to banks.

Gas station owners asked Bezas to be allowed a deposit amounting to two months’ tax difference so that they do not have to spend significant funds at once, a demand which according to sources has been accepted. The two sides will meet again this Thursday to discuss again the crucial details of the plan.

One of the points that concerns the Finance Ministry is the risk of reserves of heating oil being built up in the coming months. Sources suggest that in order for the tax difference to be returned to gas station owners and the autonomous traders, fuel must have cleared customs after January 1, 2008. All invoices will be thoroughly checked, ministry officials argue. This is one of the solutions proposed to overcome this obstacle.

Today the Special Investigations Service (YPEE) is beginning its checks of fuel trading. On a monthly basis its investigators will perform about 3,000 checks across the country, aiming at reducing tax evasion and illegal trade in this domain. Investigators will be targeting all types of trucks, buses, tankers, et cetera. If there is tangible evidence from these checks that trading companies or gas stations have supplied trucks with heating oil or with diesel diluted with heating oil or other oil products, the checks will expand to those companies as well to investigate possible customs or tax infringements.