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The effect of the decrease of oil’s price into real economy

By summer 2014 until today it is observed a significant and continuously decrease diesel’s price. By the level of 110$ per barrel which had been in summer 2014, it reached in its lower levels of the last 11 years, with 33$ per barrel and decreasing trends.
After the denial of OPEK about reducing diesel’s production from the level of 31,5 million barrels daily, its price is sliding continuously. The reasons for that international reduction are many. The main reason probably is the increasing production of shale gas by the USA and the simultaneously increase of its stocks in diesel. Alongside the supplement of stealthiness oil by the Islamic nation presses more and more the cost and by that way is achieved an economic pressure towards Russia which base an important share of its economy on the income by energy market. Furthermore, the economic instability in Asian economy during the latest days has worsened the situation.

Brent Oil

The effect by that alteration in international economy is important. On the one hand that impact supports and caters for the international development whereas on the other hand put pressure on the economies of countries that product diesel and on the efforts made by the Ε.C.B. for bringing back the inflation into levels of 2%. It is believed that constitutes the primary cause for activating the Q.E. of the E.C.B. in its effort of bringing back the inflation into economic acceptable standards.

Average Fuel Prices

  • Average Petrol Price
  • Average Diesel Price

For Greece, this decline accelerated the deflation and created conditions for the development of extroversion by the devaluation of €. The most significant changes, however, which are apparent on the real economy is the decline in fuel prices. More specifically, in 2013 the average retail price of petrol according to fuel price observatory was 1,696 € and for diesel was 1,395 €. Consumption in 2013 was 3,488,602 m3 of petrol and 2,720,158 m3 of diesel. The total expenditure on fuel for 2013 was 9.7 billion €
In 2014 began to embody part of the reduction in fuel prices the average cost of a liter of petrol was 1,645 € (-3%) and for the diesel 1,344 € (-3,6%). The consumption for 2014 was 3,322,943 m3 of petrol ( -4.7 %) and 2,928,618 m3 of diesel (+ 7.7 %). The total cost of fuel in 2014 was 9.4 billion €. 300 m. € less for fuel or 3,1 % compared to 2013.

Fuell Consuption

  • Petrol Consumption
  • Diesel Consumpion

The greatest impact by prices falling appeared in 2015. The average price for petrol is 1,478 € decreased by 10.1% compared to the average price of 2014. For diesel the average price amounts to 1,173 € less 12.7% compared to 2014. On the other hand, the consumption of fuel after the capital controls has reversed from a slight positive that it was in the early months of 2015 to negative. According to data for the first 9 months of 2015, petrol consumption is about 6% lower than in 2014 and the diesel consumption of 2% down. Based on these data, the consumption for 2015 is estimated at 3.123.566 m3 for petrol and 2.870.040 m3 for diesel. According to these data the total cost of fuel in 2015 will be € 8.0 billion or 14.6 % lower than in 2014 .

Total expenditure for fuell in bn €

  • Expenditure for fuells in bn €

At this point it should be noted that there are no included data for the consumption of gas that remains still at low levels but increasing significantly every year

Also, oil prices internationally are changing rapidly, which it makes very difficult any assessment of their course in 2016 and therefore any estimate for repetition of reducing fuel costs during the year.