Dear friends, good day to you!
In the end, is the reduction of the Special Consumption Tax on fuels an effective measure or not? The question arises from government policy itself. Because for months, every time the issue of reducing indirect taxation to address high prices was raised, the answer was negative. The arguments were specific. Across-the-board tax cuts do not ensure that the benefit will reach the consumer in full, while especially the reduction of the excise tax on fuels entails a large fiscal cost.
Kyriakos Mitsotakis himself had acknowledged last June the reason as well. Greece, he said, has historically higher taxes on fuels because they have constituted, under all governments, a significant “blood donor” of public revenues. And he had added that whoever asks for a reduction of the excise tax must explain where approximately one billion euros that would be lost from the budget will be found.
A clear and absolute position. Except that today this position has changed.
With energy prices once again putting pressure on households and businesses, the government is keeping open the possibility of a temporary reduction of the excise tax. The prime minister states that Greece cannot proceed unilaterally without cutting some other expenditure and is asking Europe for the fiscal leeway so that it can do exactly that.
In other words, what until now was rejected as fiscally problematic is now on the table as a possible measure for dealing with the energy crisis.
The U-turn is obvious. And behind it lies a much more interesting reality: the dependence of the Greek budget on indirect taxation.
The numbers are revealing. According to AADE data, already in 2024 revenues from excise taxes on energy products had exceeded 4.2 billion euros. In 2025 they amounted to approximately 4.38 billion euros. If VAT on fuels is added, the annual bill for consumers and correspondingly, revenues for the State reach according to estimates 6.5 to 7 billion euros. In the case of unleaded gasoline, more than half of the final price at the pump corresponds to taxes.
Herein lies the essence of the matter. The problem is not that the government suddenly discovered some new economic tool. It knew the excise tax very well before too. It also knew that reducing it could limit, even if temporarily, the burden at the pump.
What it knew even better was how much it collects from it. That is why until now it preferred targeted support, allowances and other fiscal “patches,” instead of a permanent or temporary reduction of a tax that directly feeds the public coffers.
There is, of course, a different energy circumstance today. International prices have skyrocketed and the pressures are no longer limited to households. More than 700 energy-intensive Greek manufacturing businesses are already asking for emergency protection measures, while natural gas has returned to levels that cause serious concern for the winter.
And all this, of course, while the country is fully entering a pre-election period.
The different circumstance explains why the government is seeking a solution today. It does not, however, negate what it was saying until yesterday about this specific solution. This is how we also arrive at the “flip-flop”: to ask Europe today for the fiscal leeway to implement what until yesterday we were rejecting as failed, domestically.
Perhaps, after all, the recipe was not so “failed.” It was simply very expensive for the State and besides… elections are coming.