May 27, 2024

Athens News

News in English from Greece

Heating oil: is it worth filling the tank for next winter

Countries ended this winter with great satisfaction as end-of-season gas stocks reached 56% of needs, meaning the road to stocks will be easier in the coming months, especially given the steep drop in prices.

But the same concern that has arisen at the level of an entire continent should potentially concern an individual household. In that case, the roughly 1.5 million oil-heating households will have to decide whether to fill up their tanks now or risk filling up in October – in the hope that prices will be even lower.

Any decision involves risk. But the following facts should be taken into account:

1. Heating oil is currently subsidized at a price of 15 cents per litre. This subsidy will last until March 31 and will most likely not be renewed. Therefore, there are still a few days to make the appropriate deliveries at the current low price. From April 1 (provided that the subsidy is not extended until the end of the season) until April 30, when this winter season is finally closed, heating oil will automatically rise in price by 15 cents. Thus, if the average price in the country is currently 1.19 euros, then automatically it will approach 1.35 euros.

2. At present, especially in the metropolitan area, where there are 3 oil refineries at once, the price of heating oil is close to 1.1 euros per liter at them (also thanks to subsidies). This is because URAL oil has fallen in price to $52 per barrel (mainly fuel oil and diesel fuel are produced from it), and the euro/dollar exchange rate is 1.08. This raises the next question: what will be the corresponding prices in October? Will oil be cheaper? Will the euro rise in price (ie the stronger the euro against the dollar, the better for the retail price of heating oil)?

3. The third factor to consider is the government’s subsidizing policy for the new season. Will there be a discount for heating? Even if it is, it is not certain that the same increased amount will be provided for the next heating season as in the past, as this will depend on political circumstances. In addition, both the European Central Bank and the European Commission are pushing to limit support measures to what is necessary and to make them absolutely targeted. This automatically limits the chances of horizontal heating oil price subsidies.

4. The fourth factor is the weather. It is clear that forecasting for such a long period is a difficult matter, but the likelihood of a cold winter repeating, following the example of 2020 and 2021, is quite high. Naturally, in such a case, the prices for gas and heating oil will rise sharply.

These are the facts, and the consumer will have to make a decision: buy now for next winter at a price of €1.1 (the price that will exist until the end of March) or postpone the decision until later.

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