March 29, 2023

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Fuel: Pressure on demand and fear of a banking crisis on prices – a decline is also expected in Greece

Fuel prices in Greece, which have shown relative stability in the past period, are expected to register a decline, which, at least in the first stage, will not be so great as to remind the good old times of low prices.

At the moment, simple unleaded petrol prices at gas stations in Attica range between €1.75 and €2 per liter, while the average price nationwide, according to the latest data from the Ministry of Development, was €1.907 per liter (given). Prices are higher on the islands and in some continental areas). Diesel moves across the country at 1.706 euros per liter, after recording a slight decrease, while heating oil came in at 1.197 euros per liter, also recording a slight decrease of 7 cents.

Global oil prices plummeted with the collapse of US banks and fears of a banking crisis spreading to the rest of the world, putting pressure on US crude and Brent crude. The price of Brent crude reached $72.97 on Friday evening, marking a significant decline that could translate to lower prices at the pumps in the Greek market in the coming days. However, as is well known, any reduction in international trade, no matter how large or small, will relate only to the percentage of net product after taxes and duties, which is very high in Greece and mainly concerned with the largest percentage of the final price at the pump. . So if for example the price of Brent crude drops by 5%, that does not mean that final prices are at the pump going to record 5%.

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Another reason why the market believes that fuel prices will show a slight slowdown in the coming days is lower demand, especially heating oil. According to unofficial market data, demand for heating oil in February recorded a decline of 8%-10% compared to the same period last year, and for motor fuels, demand moved at about the same levels as last year.

The trajectory of demand during the March 25 holiday and the Easter holiday next month plays a decisive role in the levels of volatility that will be recorded in fuel prices in Greece in the coming period.

OPEC: Prices fell due to economic concerns

However, the oil-producing member countries of OPEC+ do not appear to attribute the international price decline to the relationship between supply and demand.

IEA officials told Reuters that the agency attributes the decline in oil prices this week to the lowest level in more than a year due to economic concerns.

Oil fell to a 15-month low on Wednesday, with Brent crude falling below $72 a barrel amid concerns about the fallout from the banking crisis, while it stabilized after Credit Suisse received a financial lifeline from Swiss regulators.