Growing concerns over developments in the global fuel market have prompted the Greek government to announce new consumer support measures for fuel prices—facilitated by the country’s two refineries. As Deputy Prime Minister Kostis Hatzidakis explained yesterday, the international fuel landscape has deteriorated to a point where such intervention is now necessary. Without it, market analysts warn that pump prices could soon climb back toward €2 per litre.
Russian Diesel Export Ban: The Key Catalyst
The most significant recent development reshaping the market isn’t renewed tensions in the Strait of Hormuz—but Russia’s decision to halt diesel exports. Ukrainian drone strikes against Russian oil infrastructure and refineries have become routine. It was only a matter of time before these attacks triggered serious supply disruptions in Russia, a global diesel superpower. The country now faces domestic shortages—and those shortages are inevitably rippling across the wider international market.
Refining Capacity Under Pressure
It’s important to note that the crude oil market operates very differently from refined fuel markets—and even among fuels, gasoline and diesel behave independently. A region may be flush with crude yet still face fuel shortages without sufficient refining capacity. Globally, refining capacity has been running near full utilization for some time. This tightness amplifies price sensitivity to any disruption.
For context: According to the European Commission’s official weekly fuel price bulletin for 9 July, Greece’s pre-tax unleaded gasoline price stood at €857 per 1,000 litres—below the EU average of €922. Diesel prices, meanwhile, haven’t yet rebounded to levels seen just months ago: Neste data shows prices around $1,000 per tonne, down from $1,400 in April. What *has* surged dramatically is the refining margin—the gap between crude oil and refined product prices. It peaked near $70 per barrel this spring and is now climbing back to similar highs.
Why Refineries Stepped In—Not Taxes
This sharp rise in refining margins likely influenced the government’s decision. Officials concluded that Greece’s domestic refineries currently possess the operational flexibility to support consumers directly—rather than resorting to windfall profit taxation, as done previously. That option was ultimately shelved—at least for now.
With the new measures in place, refiners will lower their wholesale fuel prices below what would otherwise be expected under normal market conditions. The government’s immediate focus is on ensuring the full benefit reaches drivers: the planned 10-cent discount on gasoline and 5-cent cut on diesel must be passed on transparently at the pump. Preventing profiteering at service stations is now the top priority.