Pressure on energy costs continues unabated, as prices for liquid fuels and electricity are being driven up by rising international oil and natural gas prices. Diesel and unleaded gasoline have held steady above 2 euros per liter, while this month the wholesale electricity price hit a 12 month high. The average wholesale price reached as much as 184.47 euros per megawatt hour.
For households and businesses, energy spending has surged since the war in the Persian Gulf broke out. According to data from the Piraeus Chamber of Commerce and Industry, the additional energy bill for the six months of the war, from February 28 to August 28, 2026, reached 1 billion euros.
For the current month, the government subsidized diesel by 0.10 euros per liter in an effort to absorb part of the increases. At the same time, since July 14, refineries have been offering discounts of about 0.10 euros per liter on gasoline and 0.05 euros per liter on diesel.
A Drop in the Ocean
Since the war began, the Greek state and refineries have spent 370 million euros on subsidies to cushion fuel price increases. Even so, the average nationwide diesel price is 0.477 euros per liter higher than when the war started on February 28. Diesel now stands at 2.042 euros per liter, up from 1.565 euros. Unleaded gasoline is 0.282 euros per liter more expensive, now at 2.033 euros compared with 1.751 euros.
The subsidy policy pursued in August, like the one that came before it between March and June, is showing its limits. During that period, pump interventions, including the gasoline fuel pass, cost 300 million euros. Refinery discounts from July 14 to August 31 added 40 million euros, and the state diesel subsidy came to another 30 million euros. In total, 370 million euros were spent just to keep fuel prices from climbing even higher.
At the same time, electricity prices are also trending upward. Major providers have kept their rates unchanged for five straight months, even as wholesale costs rise.
The average wholesale electricity price in August stood at around 133 euros per megawatt hour, up from 109.95 euros in July, an increase of roughly 20 percent.
Another round of subsidies, even a temporary one like the measures used during the energy crisis triggered by the Russia Ukraine war, does not solve the underlying problem of high energy prices.
The Tax Cut Question
In practice, these interventions have proven largely ineffective. They act as a stopgap and do not benefit society and the economy as a whole, nor do they offer a sustainable answer to the cost problem. According to market sources in the fuel sector, the main driver behind high prices, beyond global market disruption, is taxation. In Greece, the heavy tax burden is essentially a structural problem in the market.
For gasoline, according to data from the Price Observatory, taxes account for more than 56 percent of the price. Refineries can only influence about a third of the final fuel price.
For diesel too, the tax burden exceeds 45 percent. As a result, any cost reductions rarely reach consumers in full. Even so, the government has not moved to cut the special consumption tax on gasoline and diesel, arguing that any reduction would simply be absorbed elsewhere.
Meanwhile, during the earlier phase of the war, a number of European countries did move to cut fuel taxes to bring prices down.
