How will the government implement fuel price interventions?
The government is adopting a phased approach to energy subsidies, allowing for adjustments based on the volatility of global oil markets. Instead of a single, fixed package, the economic team is moving step-by-step to ensure that state support remains effective without overcommitting fiscal resources in an unpredictable environment.
The first phase is set for September 30, 2026, and will specifically target diesel fuel. Under this initial measure, the state subsidy at the pump is expected to remain at €0.10 per liter. Unlike previous plans that aimed to lock in rates for the entire month of October, this intervention will only cover the first fifteen days of the month. This flexibility allows the government to reassess the necessary level of support as the market evolves.
The second phase will arrive on October 14, 2026. This subsequent package will address the second half of October for diesel and, crucially, introduce measures for heating oil just one day before its market availability begins on October 15. By delaying the second phase, officials can better gauge the final market price of heating oil and coordinate state intervention with commercial discounts offered by refineries.
The role of market volatility in policy timing
The decision to split the interventions into two stages is a direct response to the high level of uncertainty in international energy markets. According to government spokesperson Pavlos Marinakis, the goal is to provide citizens with a clear picture of costs by observing both state subsidies and the commercial discounts applied by fuel companies. By waiting until mid-October to finalize the second wave, the government can integrate refinery discounts into the total price reduction seen by consumers, ensuring a more precise and efficient use of public funds.
What are the specific measures for heating oil and diesel?
Diesel subsidies will maintain a steady rate of €0.10 per liter for the first half of October, while heating oil measures focus on both direct price caps and increased allowances. The government's primary objective for the heating season is to ensure that the starting price for heating oil remains below the €1.75 per liter threshold recorded during the previous period.
For heating oil, the strategy is twofold: direct intervention in the pump price and the enhancement of the heating allowance. This allowance is designed to support approximately 1.2 million households. The current fiscal cost of this support is estimated at €173 million. The proposed plan involves a horizontal increase in the heating allowance, meaning the amount of support will rise across the board without changing the income criteria or the total number of eligible beneficiaries. Furthermore, the specific amounts distributed will continue to vary based on regional weather conditions, ensuring that areas facing harsher winters receive appropriate assistance.
Coordinating state support with refinery discounts
A critical component of the fuel price strategy is the interaction between government subsidies and private sector activity. The government is closely monitoring the commercial interventions planned by fuel companies and refineries. The intention is to combine these private discounts with state subsidies to form the final price at the pump. This holistic view aims to prevent a situation where state funds are used to offset discounts that companies would have provided regardless, thereby maximizing the impact of every euro spent on consumer relief.
Why is the reduction of excise duties on fuel unlikely?
A reduction in the Special Consumption Tax (Excise Duty) on fuels is currently considered unlikely due to significant fiscal constraints and the absence of a pan-European consensus. While the government has expressed support for lowering these taxes to ease the burden on citizens, the practicalities of funding such a move present a major hurdle.
The primary obstacle is the massive revenue generated by the excise duty. According to government spokesperson Pavlos Marinakis, the excise duty contributes approximately €4 billion annually to the state coffers. Reducing this tax would create a substantial deficit in the national budget that the current fiscal framework cannot easily absorb. For such a measure to be implemented, two specific conditions would need to be met: the government would need to secure the necessary funding to replace the lost revenue, and the European Union would have to grant a special exemption from existing spending limits (expenditure ceilings).
The challenge of EU spending limits
Even if the government could find the funds to offset a reduction in excise duties, the issue of EU fiscal rules remains a barrier. Under current regulations, extraordinary tax cuts are often viewed as deviations from fiscal stability targets. To implement a significant reduction in fuel tax, Greece would require an explicit exception from the European Union, allowing these measures to be excluded from the calculation of national spending ceilings. Currently, there is no widespread consensus among EU member states to relax these rules for such purposes.
Key takeaways
- The first phase of fuel price interventions begins on September 30, focusing on a €0.10 per liter diesel subsidy.
- The second phase of measures will be announced on October 14, covering heating oil and late October diesel.
- The government aims to keep the starting price of heating oil below €1.75 per liter.
- Heating allowances for 1.2 million households will see a horizontal increase without changing income eligibility.
- Reducing excise duties is restricted by a €4 billion annual revenue requirement and EU spending limits.
Frequently asked questions
When will the diesel subsidy be applied?
The first diesel subsidy phase begins on September 30, 2026, and will cover the first fifteen days of October. A second phase for the latter half of October will be announced on October 14, following an assessment of international market trends and refinery discounts.
How much is the diesel subsidy per liter?
The state subsidy for diesel fuel is set to be maintained at €0.10 per liter. This amount is intended to help offset high costs at the pump, though the final price will also depend on commercial discounts provided by fuel companies.
What is the target price for heating oil?
The government is targeting an opening price for heating oil of less than €1.75 per liter. This target is designed to ensure that the cost of heating remains more affordable than it was during the previous heating season.
Who is eligible for the heating allowance?
The heating allowance is expected to support approximately 1.2 million households. The current plan involves a horizontal increase in the amount provided, meaning the criteria for who receives the aid will remain the same, but the value of the aid will rise.
Can the government reduce fuel excise duties?
A reduction in excise duties is currently difficult because they generate €4 billion for the state annually. To implement such a cut, the government would need to find alternative funding and receive a special exemption from the European Union regarding spending ceilings.
