Fuel consumption drop cuts Greek state revenue by 211 million euros

Greek state revenues have seen a notable decline in excise taxes on energy products, falling short of targets by 211 million euros in the first half of 2026. This shortfall reflects a significant decrease in consumption, a trend observed despite generally higher tax revenues from VAT during the same period. The drop in consumption is directly linked to the surge in energy prices following the conflict in the Middle East.

While a milder winter contributed to lower heating oil consumption in the first quarter, the situation worsened after March. Data indicates a 2.2% decrease in gasoline consumption in March-April, with a more substantial drop in May. Conversely, diesel consumption for commercial transport and other essential activities remained relatively stable. This overall reduction in fuel usage has impacted government coffers, creating a deficit that VAT revenue increases have not fully compensated for.

In response to the escalating energy costs and their impact on consumers, Prime Minister Kyriakos Mitsotakis announced an additional 10-cent per liter discount on diesel fuel for August. This measure, estimated to cost 30 million euros, aims to provide some relief. The government is considering extending this discount if Middle East tensions persist and international energy prices remain high. This intervention is funded by a surplus from the previous year's budget.

Despite the challenges, early indicators for the summer months suggest a gradual recovery in fuel consumption. Factors contributing to this potential rebound include increased travel, ongoing subsidies, and a boost from tourism. The period of temporary de-escalation in energy prices following the U.S.-Iran agreement for negotiations in June also played a role in this observed partial recovery.