Based on the latest information and discussions between the government and refineries, a scenario is emerging in which heating oil launches this season at €1.50 a litre. The government is due to announce new fuel measures today, while Brent remains elevated.
In practice, and according to the same sources, the “package” to be announced today by Environment and Energy Minister Stavros Papastavrou and Deputy Minister of National Economy Thanos Petralias will provide for a subsidy at the pump for heating oil which, together with the discount from refineries, will amount to a cumulative 40 cents a litre.
Of that, 20 cents will come from the budget, while the remaining 20 cents will be contributed by refineries.
If this scenario is borne out, and judging by the current price of €1.89-€1.90 a litre — what heating oil would cost if the season began today — sales are expected to start tomorrow at around €1.50, barring any surprises.
Although this would certainly offer significant relief to households, the price would still be 36% higher than the opening price for heating oil last October, when the fuel launched at €1.10 a litre, underlining the difficult winter ahead.
At the same time, information suggests that the subsidy for diesel and petrol will remain at the same levels for the next fortnight.
In summary, based on what was known as of yesterday, the subsidies at the pump to be announced by the government today, alongside corresponding announcements from refineries, translate into:
- 40 cents a litre for heating oil (20 cents from the budget and 20 cents from refineries)
- 20 cents a litre for diesel. According to the latest price survey, the national average is €2.118, while prices reach €2.37 in the Cyclades and €2.22 in the Dodecanese. In many areas, diesel is selling for close to or more than €2.20.
- 10 cents a litre for unleaded petrol. The latest price survey puts it at €2.199. It is selling for €2.40 in the Cyclades and more than €2.30 in the Dodecanese, while in 29 of the country’s 52 prefectures it is above €2.20 a litre.
As for unleaded petrol in particular, the 10-cent subsidy is reportedly likely to be provided from now on through a different scheme from the one in force until recently. Details are due to be announced today.
It is worth noting that, as the government has announced, subsidies are reviewed every fortnight, which means it remains to be seen whether they will stay at the same levels from 1 November onwards, when households are expected to begin buying heating oil in larger volumes.
The crucial European Council summit
The key question, of course, is whether the country’s fiscal capacity can support a repeat of similar subsidies throughout the winter, especially if the energy crisis continues well into 2027. This makes the summit tomorrow and the following day particularly important, as it will determine the fate of Greece’s, Italy’s and other countries’ request for fiscal flexibility.
Ahead of tomorrow’s summit, European Commissioner for the Economy Valdis Dombrovskis rejected the case for new fiscal exemptions at the Eurogroup a few days ago. Against that backdrop, it is significant that moves such as the recent Trump-Putin agreement on exports of Russian oil products to the US and the global market, beyond their political impact on Europe, do not appear, according to experts, to be delivering the expected results.
Trump’s announcement of an “energy truce” does not appear to have any basis for now, as Ukrainian drone strikes on Russian refineries continue, while the war in the Persian Gulf shows no signs of easing and the oil-products crisis facing Europe, which has lost 20% of its refining capacity in recent years, has not only failed to ease but is also worsening.
The crisis is being sustained both by the price of crude, which remains firmly around $105-106 and is being driven by a range of factors — from low refining throughput in the Gulf to continued Houthi attacks on Saudi Arabia — and by freight rates, which cannot be explained solely by the cost of bunker fuel.
Although it may seem paradoxical, our sources say that while Saudi exports via the Strait of Hormuz and other routes have recently increased, meaning more barrels are reaching the market, freight rates are remaining at exceptionally high levels rather than easing.
Higher insurance costs, delays at maritime chokepoints and the need for transshipments on the one hand, and longer voyages adding as much as 22 days on the other — such as the route via Suez and then around southern Africa — create a toxic cocktail that is keeping freight rates firmly elevated and adding to the problems caused by Europe’s deteriorating refining capacity.
In practice, as Allied QuantumSea said in a recent report, the market has shifted from relying on one troubled corridor to a system of multiple routes that are all facing problems at the same time.
The Strait of Hormuz requires special transit conditions, while the port of Yanbu, where the East-West pipeline ends, shifts risk exposure towards the Red Sea and Bab el-Mandeb. Meanwhile, alternative barrels from the Atlantic mean longer voyages and greater competition for vessels of every class: VLCCs, Suezmaxes and Aframaxes.