New wave of price increases

A new boom in prices is about to hit the domestic market, as production costs are burdened continuously by the large increases in taxes imposed on fuel.

Despite the agreements reached by the Minister of Economy and Regional Development Mr. Mihalis Chrisohoidis, consumers will find it difficult to avoid the impending increases. It is characteristic that, according to official figures of the Hellenic Statistical Authority, the production price  index in December rose by a record 7.6% per annum, while compared to November, prices have increased by 1.8%.

Production prices are now at the levels of August 2008, when the crisis had not yet taken its toll and when oil prices had reached a worldwide high of 150 dollars per barrel; those are at $85 now, with a smaller proportionate decrease in the value of the euro versus the dollar.

Given that there exist increases in terms of foreign production, it is evident that Greek consumers find themselves in a crossfire: on the one side, there are major inflationary pressures engendered by heavy fuel taxation and on the other,  we have the recovery of economies worldwide, which feeds demand.

It is no coincidence that for two consecutive years, studies on the economic climate carried out by the Institute for Economic and Industrial Research, show that households express the view that prices will increase in the near future.

At the same time, cunning and illegal providers are rife in the local fuel market. International oil prices have been scaling downwards for nearly two weeks, while the euro has been strengthened against the US dollar. Characteristically evident is the fact that the price of unleaded petrol at refineries has dropped by almost 5%, but gas station average prices are 0.7% lower, ie 1 cent per liter…