The new state subsidy on diesel fuel comes into effect today, aiming to ease the rising cost of transportation for both businesses and households. The measure will remain in place until August 31, with the possibility of an extension if international oil prices stay elevated and pressure on the fuel market continues.
How much is the diesel subsidy?
The intervention provides an additional subsidy of €0.10 per liter, on top of an existing agreement between the government and refineries for a €0.05 per liter discount on diesel. The total fiscal cost of the new measure amounts to €29 million. According to the latest data from the Liquid Fuel Price Observatory, the national average price of diesel is currently hovering just below €2.00 per liter, while unleaded gasoline stands at €2.05–€2.06 per liter, remaining at particularly high levels.
If the new state subsidy is passed on in full at the pump, diesel prices are expected to drop by approximately €0.10 per liter compared to current levels, given that the refinery discount has already been factored into existing prices. As a result, the national average could approach €1.90 per liter.
How will the new fuel prices take shape?
In Attica, where diesel currently sells for around €1.90–€1.95 per liter, prices could fall to approximately €1.80–€1.85. In contrast, in the Cyclades, the Dodecanese, Corfu, and other tourist destinations — where prices already exceed €2.10 per liter — the subsidy offers some relief but falls well short of closing the significant gap with mainland Greece.
Despite the new government intervention, consumers are finding that fuel price reductions are far smaller than initially announced. It is worth recalling that the government had reached an agreement with Greece’s two refineries for a €0.10 per liter cut on unleaded gasoline and €0.05 per liter on diesel, with the aim of offsetting part of the international price surge.
In practice, however, drivers are struggling to notice any meaningful difference at the pump. The latest escalation of the Middle East crisis has pushed Brent crude back toward $90 per barrel, driving international fuel prices higher once again and erasing much of the agreed discount. As a result, price reductions at pumps across much of the country have been limited to just a few cents, while on many islands and tourist destinations prices have remained virtually unchanged, leaving consumers with no real relief.
What will determine fuel prices in the months ahead?
The government’s economic team believes the additional diesel subsidy will act as a buffer against rising transportation and supply chain costs, helping to contain inflationary pressures in the market. However, what drivers ultimately see at the pump will continue to depend heavily on the trajectory of international oil prices — and above all on geopolitical developments in the Middle East. If Brent crude continues its upward climb, there is a real risk that a large portion of the new state subsidy will be absorbed by rising global prices, significantly reducing the benefit that ultimately reaches consumers’ wallets.
