The country’s two refiners watch skeptically, ELPE as well as Engine oilher suggestions European Commission on the introduction of a temporary emergency income tax in 2022, which Greek government it is said to support and accept, whether or not they eventually become binding on Member States.

Revenue pressure to support electricity and gas subsidies is high, and taxing the high profits of €874m combined (adjusted net) for the two refineries in the first half of 2022 alone is a new source of funding absolutely essential to support households in the future. the face of winter and high heating costs.

EU project. cope with unprecedented energy crisis also provides for the introduction of an emergency tax on the oil, gas, coal and oil refining industries in the amount of at least 33% of their additional profits. The basis will be FY22 pre-tax profit, which is more than 20% higher than the three-year average starting in 2019.

The offer in the case of Greece is backed by refineries ELPE and Motor Oil, whose shares have already come under initial pressure with the project leak. Shares of the two companies fell more than 3% yesterday, after ELPE’s 4.78% and Motor Oil’s 4.23% decline the day before.

The profit tax plan shows that both Greek refineries are making significant investments in renewable energy and their overall green transformation and are legitimate concerns, although officially the leadership of the country’s two historic industrial groups refrains from commenting and awaits the final decisions of Brussels. . At this stage, both the amount of taxation and the calculation plan based on the previous three years, when sales and profits moved at a low level due to the pandemic, impressed the refinery side. Moreover, the profitability of oil refiners has historically fluctuated greatly, as it is directly dependent on fluctuations in refining margins.

The additional taxation plan will force processors to make significant investments in renewable energy.

Very high profitability, for example, in the second quarter of 2022 for ELPE and Motor Oil is mainly the result of the formation of refining margins at historically high levels due to strong demand for diesel and gasoline combined with improved profitability in exports, but also increased demand for Greek market due to tourism. Accordingly, in the second and third quarters of 2020, when refining margins fell to multi-year lows and demand fell due to quarantine, refinery profitability also fell to historic lows.

A problem that also worries refineries is the distortion of extra profits given their export nature. 80% of Motor Oil’s sales and more than 60% of ELPE’s are directed to foreign markets, with refiners noting that addressing one of the country’s most important and painful deficits (balance of trade) through exports is a critical issue for Greece and a central goal for the country.

An extraordinary tax on the added profits of refineries will operate in Greece in accordance with the model of taxing the extra profits of companies producing electricity and natural gas. In other words, after the balance sheets are published, the RAE will take over the management of the data and then, based on a ministerial decision determining the amounts, the process of collecting revenues attributable to the Greek state will continue, which will go to the Energy Transition Fund to finance subsidies for payment of electricity and gas bills. However, it should be noted that the process of taxing 90% of the excess profits of electricity producers for the period from October 2021 to June 2022 has not yet been completed, and the taxation of natural gas companies has been even more delayed. The ministerial decision on the taxation of generating companies was signed only last Tuesday, September 6, and the entire process of redefining and controlling profits by accountants will last at least a month and a half.