High Fuel Prices Cut Consumption and Threaten Greek Tax Revenue

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Greece is facing a growing fiscal challenge as soaring fuel prices force households to cut consumption, reducing state revenue from fuel excise taxes despite the budget surplus recorded in recent months.

The government has announced subsidies to help households and businesses cope with high energy costs, but questions remain over how much relief the measures will provide, how long they can be sustained and what will happen if the energy crisis triggered by the war in the Middle East continues.

According to data reported by To BHMA tis Kyriakis, the decline in fuel consumption has already translated into an estimated €200 million in lost revenue from the Special Consumption Tax, Greece’s excise tax on fuel. Some of the shortfall is offset by higher value-added tax (VAT) receipts, which rise as fuel prices increase.