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Expensive gasoline closed down over 350 gas stations in Greece

29 May 2010 / 09:05:32  GRReporter
4936 reads

Victoria Mindova


The negative effect of the increases of the indirect tax on fuel and the increase of VAT deeply affected private gas stations, over 350 of which were forced to close down after the introduction of the emergency economic measures in Greece. The Association of Greek gas stations reported that in one year the price of petrol has increased by 60%, and in the last three months a 20% decline was observed in the sales of gasoline.

Only in February 2010 the price of gasoline was raised by 40 euro cents or this is 37 percent up due to tax inflation, as the President of the Hellenic Chamber of Commerce Vassilis Korkidis calls it as well as the rising of the international prices of fuel. "People are now considering whether to drive their cars," says 39-yeasr-old Maria from Athens and explains: "We have relatives from Kavala, whom we visit twice a month. For our family this is a kind of holidays and diversity. With the increase of the prices of gasoline these family trips drive us well beyond the family budget."

From the first of July this year the final voted to increase of the value added tax will also enter into force, and with it the index will reach 23% from the 19% at the beginning of the year. Many traders say that the first impact of the increase in VAT (from 19% to 21%) in April was partly taken by the private business, but the second increase from 21% to 23% will lead to much higher prices. Increased tax burdens and financial constraints do not leave another opportunity for small entrepreneurs and sole owners of individual gas stations but to suspend their activities. They prefer to close down their businesses rather than to sink into debts to creditors and suppliers they cannot afford to pay.

Restrictive measure to set a ceiling of the fuel prices by the government of George Papandreou turned out to be the wrong move and instead of helping the market it completely suffocated the retailers. Government aimed at preventing the drastic speculative increase in the prices for the end user, but did not take any measures to retain their wholesale prices. Thus, commercial refineries in the country increased the wholesale prices and transferred an additional financial burden on the gas stations. In the general, stifling economic climate in Greece, many of these retailers did not survive and went into bankruptcy. The large petrol stations chains, however, which are in joint holdings with the refineries continued to work and formed a new monopoly in the local market. As a result of this on the real estate market appeared new offers for the sale of bankrupt empty gas stations, bought for a mere song according to the experts.

Tags: EconomyMarketsNews
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