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Duty free petrol stations restoring made the sector angry

18 January 2011 / 11:01:08  GRReporter
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The proposal of the Ministry of Finance to restore duty free petrol stations in Greece raised the union of Greek petrol stations owners again. The government unexpectedly announced the last week that it intends to allow duty free petrol stations in the border areas of Kakavia, Evro and Evzoni to resume work after they had been closed for five years. The owners of petrol stations in these regions reacted strongly and threatened to block border exits to Turkey, Macedonia and Albania if the Ministry implements its intentions.

The first to respond were the petrol stations owners in the region of Kilkis who symbolically blocked the border crossing point at Evzoni for half an hour on Monday morning. The following actions are expected to be more drastic as fuel traders from the affected areas are ready to raise barricades at border exits to neighbouring countries which are not EU members. GRReporter turned to the general secretary of the Greek federation of suppliers and dealers of fuel Vassilis Kochos for more details on the matter.

He said that duty free petrol stations in Greece were closed in 2006. The extreme measure was resorted to after tax authorities inspection had found that duty free petrol stations were a major source in the chain of illegal distribution of fuel in the country. "Untaxed fuel from these stations did not go as intended but in the wrong hands and on the black market," explained Kochos. According to the general secretary of the trade union, the government decision to restore their permissions will only strengthen illegal trade again.

"Currently the government has decided to install an electronic system to control the movement of fuel only at the stations. We support and welcome this initiative." Kochos stressed that the fight against smuggling and black marketing of fuels would be effective only if all levels are controlled – from the refinery to the tank of the car. "The electronic control system at petrol stations brings to the government additional revenues of around 100 million euros a year. If it is applied in all levels the revenues will increase to one billion euros or even a billion and a half per year."

Around 1300 petrol stations in total in the country have closed in 2010. Economic crisis, higher excise duties and overall reduction of income have resulted in reduced demand. That is why another 1500 petrol stations only survived and most likely they will also close in 2011. Around 45 stations in the border areas have failed so far. According to the federation, the opening of duty free petrol stations will further harm ordinary traders because they will not be able to compete with their low prices and the areas around the border will "dry up" completely, and people will have to travel to the border to fill the tanks of their cars.

The inevitable question is why the Finance Ministry decided to give the green light to duty free petrol stations right now. GRReporter tried to find the answer calling the Public Relations Department at the Ministry of Finance but failed to get in touch with its representative. According to Vassilis Kochos, it is all about a personal service the Ministry is granting the owner of the duty free shops company. The company was state owned until 1998 and then it was partially privatized. After 2003 the company was fully privatized and the owners had exclusive rights for the duty free shops in Greece to 2008 against 58.7 million euros, according to information in the company's website. The company itself is part of the largest corporate group FOLLI FOLLIE which owns two of the largest shopping centres in Athens - Attica and Golden Hall. The corporation is also engaged in import and trade of jewelry, cosmetics, clothes, accessories and luxury goods.

The federation of Greek fuel traders and suppliers and the union of petrol stations owners will meet on Thursday, January 20 this year, to decide what strike actions against the opening of duty free petrol stations to take. "Duty free petrol stations are only part of the problems in the sector. There are still many issues that we want to present in public. We will tell more after the meeting of the federation that will take place on January 20," said the general secretary of the union.


Tags: EconomyMarketsPetrol stationsDuty free zonesGreece
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