Monday, September 24, 2012

3rd World Greece

On  a vacation to the Dominican Republic I remember flying over Haiti and looking down at a brown lump of land. apparently devoid of trees right up to the line that marks the land border with the Dominican Republic. Haiti, the poorest  country in the Americas has long been spiralling into ever more intense poverty that robs the land of its future as its desperate people consume every last natural resource in reach in an attempt to stay alive. As ghastly as that is, the situation is now showing itself in Europe, in the ancient seat of European civilization.
 
 
Greek consumers are seeking out alternative ways of heating their homes as, at 1.30 to 1.40 euros per liter, the price of heating oil has become prohibitive for many following the increase of the special consumption tax to 80 percent of that on diesel.
 
In large cities, although most heating oil tanks have been filled since April, when the price stood at just 1.05 euros/l, more and more people are taking the decision not to turn on their central heating this winter unless the temperature drops to very low levels. In rural areas, and particularly in northern Greece, the majority of consumers made the switch last year, opting mostly for fireplaces and wood stoves, while demand for wood and pellets has soared. Demand for wood is showing a 100 percent increase compared with last year.
 
Traders estimate there will be a serious shortage this winter while the average price of firewood has risen by some 10 percent from last year. High demand for wood has led to a massive increase in illegal logging in mountainous regions of the country, where forests and even orchards are being depleted, along with a rise in illegal sales. There has also been a considerable increase in wood imports from Bulgaria, which, according to traders, covers some 90 percent of demand in Macedonia. The market estimates that this year’s rise in the price of heating oil means it’s 60 percent cheaper to heat one’s home by burning wood, with urban dwellers catching on fast despite the technical difficulties of building a fireplace or installing a wood stove in apartments. “I do not see us moving any [fuel] trucks this year.
 
At Koropi the number of wood traders has grown from five to 30 and at Anavyssos from three to 25,” the president of the Federation of Fuel Traders of Greece, Michalis Kiousis, told Kathimerini, referring to areas in eastern Attica. He added that the losses suffered by heating oil sales last season were largely reduced in April as consumers rushed to fill their tanks ahead of further price hikes. Countryside fuel stations whose turnover relied mostly on heating oil will now have to shut down, says Kiousis.
 
However, fuel stations across the country are feeling the effects of the change in consumers’ home-heating practices. Very few trading companies now sell fuel on credit, he notes, as most prefer cash transactions, while a number of companies have been demanding cash in advance since last year. In Attica, Thessaloniki and Thessaly, where natural gas networks have been installed, there has been an increase in connections since last year. Last winter, it was 19 percent cheaper to heat one’s home with natural gas from the Attica Gas Supply Company than with heating oil, while this October the saving will rise to 35 percent.
 
Due to the steep rise in the price of heating oil, the Finance Ministry is seeking fair criteria for the payment of heating oil benefits as it recognizes that a major portion of consumers are unable to cover the cost involved. Yiannis Psychogios, the head of the Association of Oil Product Trading Companies, says the heating oil price hike is the biggest problem his sector is facing. He estimates that the drop in demand will amount to 20-40 percent year-on-year. The average cost of the various heating systems per year is now estimated as follows: Heating oil -- 3,000-4,000 euros, natural gas -- 2,100-2,800 euros, pellet burners -- 1,100-1,400, air-conditioning units -- 800-1,000, wood stoves or energy-saving stoves -- 500-700 euros.

No comments: