Greece caps heating oil prices below €1.75 per litre with dual state and refinery subsidies

Interventions for the winter heating season

Greek Prime Minister Kyriakos Mitsotakis announced a package of energy support measures during a televised interview on ERT on 17 September 2026. The government aims to suppress heating oil prices below €1.75 per litre when seasonal distribution begins on 15 October 2026. Economic ministries target a final pump price between €1.50 and €1.60 per litre. Domestic estimates indicate that without state intervention, heating oil would enter the market near €2.00 per litre due to elevated international fuel prices and depleted global strategic oil reserves. During the previous heating cycle, the fuel debuted between €1.09 and €1.13 per litre in October 2025 before closing at €1.75 per litre in April 2026. The planned relief framework combines direct state subsidies with discounts from domestic refineries to reduce retail prices by €0.40 to €0.50 per litre.

If we do not do anything, heating oil will open at 2 euros per litre, which is not acceptable to the government.

Fiscal constraints and excise duty discussions

The economic team has up to €200 million in remaining fiscal space to finance consumer interventions for the upcoming winter. Mitsotakis noted that any temporary reduction in the Special Consumption Tax (EFK) on fuel depends on European Union fiscal leeway regarding spending limits. Greek gasoline excise duty stands at €700 per 1,000 litres, compared to the European Union minimum of €359 per 1,000 litres, while diesel duty is set at €410 per 1,000 litres. The seasonal heating oil duty of €0.28 per litre, down from the standard €0.41 per litre, generates approximately €300 million in state revenue. National Economy and Finance Minister Kyriakos Pierrakakis was scheduled to address fiscal flexibility and energy price pressures during the Eurogroup meeting in Dublin.

The budget cannot withstand a reduction in the special consumption tax at this time. But if we had special permission from Europe to do so, so that it would not count toward spending ceilings, we would certainly do it temporarily.

Broader fuel supports and household energy costs

Beyond heating oil subsidies, the government is expanding the horizontal heating allowance, with higher allocations directed toward regions experiencing lower winter temperatures. The allowance includes households using heating oil, natural gas, electricity, firewood, pellets, liquefied petroleum gas, and district heating. Natural gas now heats roughly one-third of Greek households, where residential variable rates have climbed 75% compared to September 2025. Market estimates place winter gas prices between €80 and €85 per unit, with adverse forecasts reaching €100 per unit, representing a 20% to 40% cost increase for consumers. For transportation, the €0.10 per litre diesel subsidy will extend through October 2026, while profit margin caps will be reinstated across fuel marketing firms and retail petrol stations. Detailed operational terms are scheduled for release by the finance and energy ministries at the start of next week.