The Greek government will announce measures on heating oil, automotive diesel and the heating allowance on Wednesday. At a summit of EU leaders in Brussels on Thursday and Friday, it will then seek greater fiscal flexibility to respond to high energy prices. Athens wants more room for temporary, targeted support for households and businesses without putting fiscal stability at risk. The fuel and heating allowance measures due Wednesday will stay within existing budget limits, and the government has earmarked 400 million euros in reserves. About 200 million euros is available to be spent immediately through the end of 2026. The remaining 200 million euros will be held in reserve for 2027 to cover any needs from January through April.
Three Price Scenarios
The size of the heating oil subsidy, which is applied directly at the pump, is expected to be finalized Tuesday depending on international markets and the price of Brent crude, the global oil benchmark. The government’s economic team wants heating oil to start at less than 1.75 euros per liter on Oct. 15, the price at which it ended last season.
Officials are weighing three main options. The most modest would set the price at 1.71 euros through a subsidy of 25 cents, with 15 cents coming from the state budget and 10 cents from refineries. A second would bring the price down to 1.61 euros, with total support of 35 cents. The costliest for public finances would cut the price to 1.41 euros, requiring a subsidy of 55 cents paid entirely from the state budget.
Heating Allowance
Plans call for an across-the-board increase, possibly of 20%, in the heating allowance, a government payment toward heating costs that goes to about 1.2 million households. Income criteria and the number of recipients will remain unchanged, and payment amounts will continue to reflect each region’s climate.
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The Push in Brussels
Energy will feature prominently at the European Council on Thursday and Friday, alongside competitiveness and the affordability of goods and services.
A proposal from Greece and Italy for greater fiscal flexibility to counter high energy prices appears to be gaining traction, as more member states warm to the idea of temporary, targeted support for households and businesses. At last Thursday’s meeting of the Eurogroup of eurozone finance ministers, Greek officials saw growing backing for Athens and Rome’s call for more room for maneuver, according to sources. High fuel and energy prices continue to squeeze disposable incomes and drive up operating costs for businesses.
Prime Minister Kyriakos Mitsotakis heads to Brussels having already secured an energy escape clause, which allows Greece to exempt nearly 1 billion euros in additional energy investment through 2028 from EU spending limits. Athens wants to build on that decision and push the discussion further. According to sources, the aim is to pave the way for part of the 1 billion euros under the clause to fund temporary, targeted support for households and businesses hit by high energy costs.