Fuel prices have been on an upward trajectory in recent weeks with simple unleaded having approached 2.4 euros per liter at gas stations in Attica, while on islands such as the Cyclades the average pump price moves steadily at 2.2 euros. Although wholesale prices are expected to fall on Wednesday, any reduction – which market players say will not be very noticeable – is expected to be recorded after a few days as gas stations tend to stockpile some quantities.
At this moment, however, Greek consumers are paying dearly for the high “flights” recorded by Brent last week when the fear of an ignition of the geopolitical crisis in the Middle East was still widespread. Of course, there is no shortage of cases where some gas stations react “instantly” to the upward movements of the international price or the fall of the dollar against the euro, an unnatural move that alludes to cases of obscene profit despite the ceiling that has been set.
On the other hand, market factors also draw consumers’ attention to particularly low prices. Speaking recently to ERTNEWS, the president of the Union of Gas Stationers of Attica, Maria Zaga, analyzing the situation prevailing in the Greek market, he noted that “the situation is a bit strange, which is due to the turbulences that occur internationally in prices, but we gas station owners should not always pay for it, that we ourselves raise the prices. We have a two-year cap, which means that our profit percentage is locked in. 60% of the 2 euros/liter is tax. We are the 3rd most expensive unleaded country in Europe. If the Excise Tax drops we will drop to 11th place. But it can also be an average price in Attica and Thessaloniki from 1.95 to 2 euros per liter and I see gas stations selling at a price of 1.85 and no one talks. I’m not saying that all the cheap shops are correct, but the shops that catch with tampered pumps and adulterated fuel are cheap shops”.
Representatives of the Greek fuel market have long predicted that as we get closer to Easter the prices will increase and if the trend of the last few days continues, then the price will exceed 2 euros in Attica and Thessaloniki. On the other hand, the drop of Brent to 88 dollars on Tuesday compared to 90 a few days ago does not automatically signal a significant reduction in the prices of the Greek market nor does it foretell a steady downward trend. On the contrary, fuel prices are expected to show volatility with the fluctuations currently being of a small scale.
Why isn’t the price of oil falling?
Brent has been holding steady above $85 of late with the market easing slightly as – so far – the worst of the Israel-Iran conflict has been avoided. This does not mean that the crisis is over and that the market is not in a balance of terror where oil is one of the commodities that are particularly sensitive to the prevailing climate. However, the state of the global economy also exerts upward pressure on prices. Eurozone data showed that, this month, business activity grew at the fastest pace in almost a year.
Investors are also awaiting March’s US gross domestic product and personal consumer spending data, the Fed’s preferred indicator.
“A low GDP number below 3% could push the Fed and put less pressure on commodities,” Alex Hodes, oil analyst at brokerage StoneX, told Reuters. “However, a reading of more than 3% could trigger a further rally in the dollar, which would put more pressure on commodities.”
