The countdown has begun for the unveiling and implementation of the new energy support package for households and businesses announced by Kyriakos Mitsotakis. Next week, the relevant ministries will move forward with the detailed specification of measures that include a generous subsidy on the retail price of heating oil, bringing it below €1.75 per litre from October 15th when it enters the market, a across-the-board increase in the heating allowance, and an extension of the diesel fuel subsidy.
New measures for heating oil subsidies
The new support package is being considered alongside the reintroduction of a profit margin cap in the petroleum market. Meanwhile, high-level discussions are intensifying within the EU, with the aim of granting member states greater fiscal flexibility to reduce excise duties on fuel consumption. When announcing the new support package, Kyriakos Mitsotakis made it clear that he would raise this issue at the EU Summit — a position that has already gained the backing of other European leaders.
Middle East developments are a key factor
In any case, developments on the conflict front in the Middle East — and particularly Saudi Arabia’s ability to supply global oil markets — will play a decisive role in determining where oil and natural gas prices settle over the coming months. These prices, in turn, will shape the level of energy costs and the scale of Europe’s response to them. The same applies to the scope of the Greek government’s interventions, which will continue if deemed necessary in the period ahead, as senior government officials have made clear. The latest developments on the war front — including the Houthi destruction of part of Saudi Arabia’s oil pipeline infrastructure connecting to Red Sea ports — have triggered yet another major shock in oil and gas markets. The new attack sparked fresh instability, with Brent crude prices surging to nearly $110 per barrel before retreating slightly by Friday.
The measures to be detailed
The energy support measures expected to be specified by the relevant ministries are as follows:
– A reduction in the retail price of heating oil to below €1.75 per litre. The price reduction will be achieved through a combined subsidy — from both the state and refineries — to bring down a retail price that, without intervention, would reach approximately €2 per litre under current market conditions. This means the subsidy will amount to at least €0.25 per litre. It is worth noting that €1.75 per litre was the price at which heating oil sales were suspended last spring.
– An across-the-board increase in the heating allowance. The detailed specifications will clarify whether the increased subsidy will be accompanied by a broadening of eligibility criteria to expand the number of beneficiaries. The increase in the allowance, combined with the pump-price subsidy on heating oil, represents a dual line of defence against elevated energy prices.
– The continuation of the diesel fuel subsidy through October, given that high prices in this category place a significant burden on all sectors of the economy. Diesel is currently subsidised at €0.15 per litre — €0.10 from the state and €0.05 from refineries — yet the retail price remains above €2 per litre.
– The consideration of introducing a profit margin cap in the fuel market, aimed at curbing profiteering. The cap is expected to be applied at both the wholesale distribution level and at petrol stations, and will be temporary in nature.
