Giorgos Asmatoglou, former president of the Panhellenic Federation of Fuel Retailers, commented on the new fuel prices during an appearance on Parapolitika 90.1’s morning show “First Morning” with Alexandros Klossas. He clarified that the double VAT burden is a key factor shaping pump prices, analyzed why gasoline remains expensive despite a relative easing of international prices, and shared his forecast for heating oil. Explaining why prices remain high, he noted: “At one point we had $120 per barrel, but gasoline wasn’t €2.20 back then.
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Slight drop in gasoline, larger drop in diesel
Asmatoglou reported that the latest weekly refined product prices show a modest decline in gasoline — less than €0.01 — and a more significant drop in diesel of around €0.025, reflecting the fall in international prices during the previous week. He cautioned, however, that refined product prices are not always directly tied to crude oil prices, as developments in the Middle East can shift the market overnight. “It’s not 100% certain,” he said regarding the week’s downward trend.
VAT: The key to cheaper fuel
On the subject of potential market interventions, Asmatoglou confirmed that measures could be applied to diesel, unleaded gasoline, and heating oil to bring prices back to more normal levels. He explained that the core problem lies in the high VAT rate, which effectively burdens the final price twice: “It’s applied once to the base price and once to the excise duty,” he noted.
How unleaded gasoline could drop to €1.85
Asmatoglou walked through a specific scenario: if the excise duty on unleaded gasoline were reduced by €0.20 from the current national average price of €2.25 per liter, the final pump price would fall by approximately €0.25 — due to VAT being calculated on the total — bringing it down to €2.00. If the VAT rate were also reduced to 10%, as is currently the case in the North Aegean islands, the price could drop as low as €1.85. He noted that thanks to this reduced VAT rate, fuel prices at stations in the North Aegean are currently approaching those in Athens and Thessaloniki, despite the added cost of transportation.
Why gasoline is more expensive today than during previous crises
Asked why consumers are puzzled to find gasoline more expensive now than when crude oil was trading at $120 per barrel, Asmatoglou explained that at the time there was an “uninterrupted flow of crude oil” with no war disrupting supply chains. Today, by contrast, the turmoil in the Middle East has driven up insurance premiums and freight costs for tankers, regardless of the actual price of crude. “Back then we had $120 a barrel, but gasoline wasn’t €2.20… There was no war at the time,” he said pointedly.
Refineries pivot to alternative markets
Asmatoglou commented on the shift by Greek refineries toward sourcing crude from Egypt and other markets instead of the Gulf, noting that it remains uncertain how well these alternative sources can meet European and global demand. He pointed out that the Russian market is now effectively closed — both due to sanctions and because Russia itself is facing domestic diesel shortages caused by damage to its own refineries, forcing it to import refined fuels from the East. He concluded that the forced pivot toward American sources, with higher freight costs due to distance, is creating “a sense of uncertainty about what the future holds.”
When asked whether a VAT reduction would actually be passed on to consumers at the pump — as the North Aegean example suggests — Asmatoglou answered affirmatively, explaining that fuel retailers themselves have an incentive to offer competitive prices given the current slump in consumption. He noted that sales on September weekends are already down by at least 40%, and estimated that such a price reduction would “spark a significant increase in sales,” ultimately benefiting sector revenues as well.
The heating oil price forecast
Asmatoglou stated that, based on current market conditions, heating oil would start this season at around €2.00 per liter, compared to €2.05 the previous week. He recalled the prime minister’s commitment that the price would not exceed €1.75, estimating that this would require a reduction of approximately €0.30 through the complete elimination of excise duty, which would bring prices in major urban centers down to €1.70–€1.75. He added that a heating allowance will most likely also be introduced, under the same eligibility criteria as last year — with no new beneficiaries, but at a higher payment amount.
Why a price cap is so difficult to enforce
Asmatoglou noted that prices in the €1.70–€1.75 range apply to major urban centers and large-volume deliveries — not to small deliveries in remote areas, where transportation costs significantly increase the final price. He described a uniform heating oil price cap as “very difficult, bordering on impossible,” citing these regional disparities. He also recalled the problems that arose with the previous gasoline price cap, which had only functioned effectively within large urban centers and had caused considerable frustration in island communities across Greece.
