Imagine going to a supermarket and instead of paying for the groceries the store pays you for taking them away.
That is precisely what happened two days ago in the US oil market.
Producers reached the point of paying buyers to take the oil obviously because due to the lack of demand in the wake of the coronavirus pandemic they would take a beating by producing and having to store the oil.
Despite the fact that Greece’s market is not linked to that of the US one sees that reduced demand has resulted in a price drop here as well.
One must wonder whether such extreme conditions are necessary in Greece in order to reduce the price of petrol, which is among Europe’s highest.
Was it necessary for the balance of supply and demand to become so skewed in order to reduce the price for the highly over-taxed Greek consumer?
The government has an obligation to take into account all the dysfunctions in the domestic market in order to lay the groundwork for it to operate in a rational manner.
The price of fuel, which has dropped almost everywhere, is just one example of market dysfunctions in Greece.
The challenge is broader because a healthy market is the precondition for a healthy economy.
