Electricity: Why Greece is the most expensive in Europe – What will decide the fate of the diesel subsidy
The most expensive drift in Europe Greece has. In the meantime, the sharp “plunge” in the prices of natural gas and electricity paves the way for a diesel subsidy at the “pump”: Once energy prices have been “scissored”, the Government’s hands are loosened. And this is because the state now pays less than it pays to cover electricity bills and thus additional “fiscal space” is formed.
Vangelis Durakis writes
This practically means that “spending money” arises and as long as the decline in electricity and gas is maintained– the amounts that will.. be left over will be given for diesel fuel.
Besides the price of Diesel engine has skyrocketed: In October it was formed almost nationwide 10-20 cents per liter every ten days (from 1.85 euros on the 1st of the month to 2.05 on the 10th of October and almost 2.15 since the beginning of the week.
What will happen to diesel fuel?
It is not going to reach and exceed 2.20 euros, in the next ten days of the Ministry of Finance who will decide although how much subsidy will it give at the pump, for diesel.
The Ministry of Finance needs to save for the 30-40 euros to subsidize diesel in November by 15 minutes liter (or even 20 if circumstances dictate).
To find the money you don’t need to cut from the heating oil subsidy, but from what he pays for electricity and natural gas subsidies.
Be that as it may, until the end of the month, the government will monitor the course of diesel prices. If no abatement is seen, combined with international price differences, then final decisions on intervention should be awaited. Until then, there will be more indications, for growth this year it may even exceed the forecast for a GDP increase of 5.3%.
Such a development will also mean additional scope for subsidies and last minute, before the weather changes, focusing especially on diesel and heating prices – in view of the very difficult and “heavy” winter that threatens to freeze the economy and life across Europe
By far the most expensive electricity in Greece
However, despite the decline in electricity prices in general for the whole of Europe, Greece was the only one in the entire Old Epirus, which appeared at the meeting of the Energy Exchange on 19her October at the meeting, increase in the wholesale price of electricity in the Energy Exchange’s Day-Ahead Market (DAM), when all other countries are moving down.
And it is by far the most expensive purchase, with a price of 274.85 euros per megawatt hourwhen even the neighbors, Bulgaria and Italy, with movements at approximately the same levels, have a price lower by almost 100 euros per megawatt hour. Yes, the Spain and the Portugal they break the barrier of 100 euros downwards, having prices of 81.71 euros/MWh and 79.87 euros/MWh respectively.
Why Greece gets “gold” in the cost of electricity
The main reason that differentiates the Greek price so deafeningly lies in the model month ahead which applies to the Greek natural gas market. Simply put, the country’s electricity producers buy the natural gas they will need, for example, in October, one month before, that is, in September, based on the futures contract of the Dutch TTF Exchange (a predetermined price, with agreement to deliver and pay later).
They do not have the possibility of spot purchases (buy now, pay now, with immediate delivery), like Europe’s power producers, at the price set daily in the European natural gas hubs. And this is because, on the one hand, Greece does not have open interconnections, the existing ones are covered, so they do not “lift” larger quantities. And on the other hand, because the Natural Gas Trading Platform (so-called price determination system), which operates on the Energy Exchange, does not yet have the necessary liquidity, it remains a shallow market.
Gas deliveries for October, agreed by power producers since September, were made at a price of 205.5 euros per megawatt hour. This was the average price formed on the TTF for the October contract.
On the other hand, Mrgas prices at TTF know in recent days a downward course, due to two events: the filling of Europe’s warehouses and the historical fullness in European revolutionary repetitions, as a result of which there are more than 35 ships which were traveling with LNG cargoes in the Mediterranean, which do not find slots for unloading. Indicatively, the price of natural gas at the TTF closed at 61.5 euros per megawatt hour.
The low gas prices are taken advantage of by the electricity producers in Europe, who buy in the spot market, with the consequence that the wholesale electricity prices on the local Stock Markets are dragged down.
Electricity producers say lower prices next month
From the power producers that the wholesale electricity price next month will move flat lower than those of Octobersince the deliveries to be agreed for November will be based on the actual average gas price in TTF in the current month, which will affect the next month’s contract.
Also, retail prices should drop, with supplier estimates giving prices 18-20% lower than in October. The new supply prices for November will be officially announced by the providers.