As international lenders press Greece to break up near-monopolies in professions from druggists to lawyers, a lack of competition in the country’s fuel market is costing consumers hundreds of millions of euros, according to a draft International Monetary Fund report seen by the Wall Street Journal.
The IMF, along with the European Union and European Central Bank make up the EU-IMF-ECB Troika putting up a first series of $152 billion in rescue loans but delaying the last installment of $38.8 billion and a second bailout of $172 billion under the government imposes more austerity measures, reforms, and another $14.6 billion in cuts.
“Uncompetitive markets cause high costs for Greek consumers,” the report says, according to the newspaper. “Given how important energy is for the overall economy, competitiveness of Greece would be improved by better functioning fuel markets. This market needs reform,” the report said.
“The Greek market is highly concentrated and basically controlled by the two domestic refiners,” the IMF report says, adding that lower fuel prices could help push down Greece’s consumer inflation rate by more than 1%. Gasoline is near $10 a gallon, among the highest in Europe.
It said profit margins for fuel products in Greece are among the highest in Europe, and in the case of home heating oil, more than twice the European Union average, WSJ reported. The newspaper said the report outlined a chain of obstacles it says effectively prevent independent gas stations from buying fuel abroad. All importers must have facilities to hold 60 days of inventory and fuel can only be transported in large tractor-trailer tankers.
“This makes it impossible for independent gas stations to transport fuel into Greece,” the report says. The WSJ said the report warned that “owners and employees of the two refineries and their wholesalers” as well as “customs officials” would likely resist attempts to liberalize the market.