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Greeks abandon heating oil en masse

30 October 2012 / 16:10:59  GRReporter
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"This year, nobody wants to buy heating oil. No one has the money to pay for it at these prices," Mrs. Marigo, aged 82, from Patissia neighbourhood in the capital, told GRReporter. She lives in a four-storey residential block with a total of 26 flats and tenants occupy the vast majority of them. The price of heating oil has increased from 0.90 euro in 2011 to 1.4 euro in the winter season of 2012.

This season, the people living in the same residential building as Mrs. Margo have unanimously decided that everyone will seek alternative ways of heating in winter after the increase in the price of heating oil. "Last year, heating bills were already so high that many people failed to pay the monthly instalments. There were quarrels, tenants left, but that did not solve the problem." The woman said that many residents in the block were experiencing difficulties. "Many of us still owe the company that manages the allocation of overhead costs in the building outstanding payments of last winter." Her option this winter will be a portable electric heater that she will move from one room to another because the building will not use the existing heating system.

The union of property owners on its part advises house managers to convene general meetings in the residential buildings this year in order to take a clear decision on how to proceed in the winter. Even if one household insists on supplying with heating oil despite the desire of the majority of residents not to use the local heating system, house managers are obliged to order heating oil. Otherwise, the household wanting to use its radiators in the cold days is entitled to legal proceedings against the manager and the neighbours. However, unlike other years, the board of the residential building must decide not only during what hours the heating will be running but it must also collect the money for the purchase of heating oil in advance.

"This year, we have agreed to buy less heating oil just to use the heating system for half an hour in the evening when all residents are at home," Mrs. Marigo’s friend from a neighbouring block of flats said. The neighbours have arrived at this compromise after discussing the matter. Estimates show that if the December and January cold of last year happens again this year, the residents of the building will spend the same money for the purchase of approximately two times less heating oil. However, agreement is rarely reached in buildings with more occupants. Fuel retailers expect that consumption of heating oil will collapse this winter to unexpected levels.

The refusal to buy heating oil at high prices this year has put many owners of petrol stations, who are the retailers of heating oil, in a difficult situation. Although the heating season starts officially on 15 October, many petrol stations are only now beginning to obtain supplies of heating oil. There is still no interest in the heating oil, but experts claim that this trend will change. The average temperature in Greece is still above 20°C. When colder days come and night temperatures begin to approach zero, the majority of citizens are expected to change their mind and obtain some heating oil.

Meantime, the government has decided to continue to subsidize some of the households in the country, depending on their financial status, tax assessment of the property and its geographic location. The first geographical zone includes the mountainous areas with traditionally low temperatures - Grevena, Kozani, Kastoria, Florona, Drama and Evritinia. The new ordinance states that the subsidy in these areas cannot exceed 840 euro for the whole season, even if the household has consumed more than three tons of heating oil.

The second geographic zone includes the areas of Iannina, Kilkis, Halkidiki, Larisa, Karditsa, Trikala, Arcadia, Kavala, Xanthi, Rodopi and Evros. There, the state will be able to grant an aid, for heating oil for the coming winter, of 540 euro, the maximum permitted consumption being 1.8 tons of fuel. The consumers will not receive state aid for heating oil consumed above this amount.

The third zone covers the regions of Attica, Corinth, Achaia, Viotia, Lefkas, Preveza and the island of Evia, Lesvos, Chios, Corfu. There, the total subsidized quantity of heating oil per household cannot exceed 960 litres and the aid for the entire season will not be higher than 288 euro. The southern regions of Greece are entitled to the lowest amount of aid - 180 euro, and the maximum amount of heating oil is 600 litres. The tax assessment of the property of the households eligible to receive a grant for heating oil should not exceed 250 thousand euro. The income of the unmarried should not exceed 25 thousand euro per year and that of married people should not be higher than 35 thousand euro. It is not yet clear whether the aid for the heating oil purchased will be paid at the beginning or at the end of the season.

Meanwhile, three Greek banks have come out with new banking products to facilitate the purchase of heating oil. Eurobank, Piraeus-ΑΤΕ and Millennium offer preferential loans to individuals to purchase at the beginning of the season fuel for domestic purposes. The banks issue special credit cards that give bonuses if the consumers buy the heating oil from specific petrol stations and enable the citizens to pay the amount at a lower interest rate over a period of six months. Analysts comment that this measure can be a double-edged sword. The level of "bad" (unpaid) loans has been growing each passing day since the outbreak of the crisis and the widespread credit cards for the purchase of heating oil can attract new incorrect payers.

Tags: EconomySocietyCrisisHeating oilState subsidyColdGreece
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