It appears that the Government will be making decisions month by month regarding the subsidization of electricity and the reduction of fuel consumption tax.
Earlier today, the Cabinet decided to extend the tiered subsidy of electricity costs from March 1st until April 30th, 2024, for residential, commercial, and industrial consumers, while for vulnerable consumers, the subsidy will cover 100% of the increase in electricity prices imposed in June 2022.
The subsidy will last for two months, as the current measure expires on February 29th.
It’s worth noting that during this period, electricity prices were at lower levels than when the measure was first implemented.
However, due to distortions in the energy market and the impacts of external factors, the subsidy measure is extended for two months.
For 28 days, the reduction in fuel taxes continues.
Furthermore, for another 28 days, the measure to reduce consumption tax on fuel will continue.
Specifically, the measure currently in effect will end on March 3rd, and with today’s decision, it is extended until March 31st.
The reason for the short duration of this particular measure is that exercises conducted by technocrats have shown that fuel prices are much lower than when the measure was first implemented in 2022.
It is reminded that the reduction in consumption tax will continue to be 8.33 cents per liter.
Economists speaking to Phileleftheros estimate that this measure was extended for only one month so that the Government can monitor how prices evolve, thus allowing for differentiation, if necessary.
They also note that this way, the measure is somewhat more targeted, as it will be applied when prices rise.
It is recalled that the European Commission had advised the Republic to avoid horizontal measures and to apply targeted ones.