Dec. 24 (Bloomberg) -- In the Greek mountain town of Kastoria, less than an hour from the Albanian border, Kostas Tsitskos, 88, can’t afford fuel to heat his home against the winter’s cold. So he and his son live in a single bedroom, warmed by a small electric heater.
“One room is enough,” said Tsitskos, who lives on a 734 euro-a-month ($971) pension and doesn’t have the 1,000 euros a month he needs to buy heating oil.
Greece is facing a heating-oil crisis. With an economy that has contracted for five years and an unemployment rate at a record 25 percent, residents in northern Greece can’t heat their homes. Kastoria hasn’t received funds from the central government to warm schools and the mayor said he will close all 53 of them rather than let children freeze, a step already taken in a nearby town. Truckloads of wood are arriving from Bulgaria as families search for alternative fuels.
“This is the coldest place in Greece,” said Emmanouil Hatzisimeonidis, Kastoria’s mayor, in an interview in his office. “It’s winter from October to April. This year we are very lucky. Last year, it was snowing for four months.”
When temperatures fall below freezing, Tsitskos spends most of his time in his bedroom and rarely leaves the house, he said. For meals, he and his son move the electrical heater to the kitchen. Other older residents in the town spend their days at a senior center and cafes to save on heating costs, returning home only to sleep, he said.
Austerity measures have cut government salaries and benefits, raised the retirement age and reduced services.
The household price for heating oil in Greece reached 1,266 euros per 1,000 liters (264 gallons) in the second quarter of 2012, surging 48 percent from a year earlier, according to the International Energy Agency, a Paris-based organization. The same quantity cost 700 pounds (861 euros) in the U.K., according to the IEA, and $1,045 (790 euros) in New York, according to a state agency.
Greeks pay both excise and value-added taxes on heating oil that can make up 42 percent of the total cost. The mayors of the region are petitioning the government for a tax exemption.
Greece’s oil prices are high because of laws that protect the country’s two refining companies and prevent competition, said Pavlos Eleftheriadis, a lecturer in law at the University of Oxford in England, who studies monopolies.
“The Greek political system works for the insiders,” said Eleftheriadis, a native of Greece. “If you’re an insider, there will be an attempt to protect you. If you’re a poor person in Kastoria, you are on your own.”
Hellenic Petroleum SA said in an e-mailed statement that “the significant increase in the price of heating gasoil in Greece is driven solely by the sharp rise in the duty by 450 percent.”
Petros Tzannetakis, deputy managing director of Motor Oil Hellas Corinth Refineries SA, declined to comment.
Kastoria, a town of about 36,000, is on a peninsula jutting into a lake 625 meters (2,050) feet above sea level. Restaurants and taverns sit by the water, where rowers scull year round. On winter days, the sky is a clear blue and the air is crisp. In some years, the lake freezes over and residents from neighboring villages walk across. At night in December, the temperature can fall to -10 degrees Celsius (14 degrees Fahrenheit).
Kastoria is the center of Greece’s fur industry and mink is raised in the area. Many of the area’s furriers cater to a Russian clientele, and signs with Cyrillic letters hang from their stores.
Nick Sersemis, 32, said he would need 3,500 euros to heat his home with oil this winter. Instead, he’s bought 15 tons of wood for 1,500 euros and his family is sleeping in one room around the wood stove, he said. He worries about the schools his two boys attend.
“I know this winter they won’t have heat at their school,” Sersemis said. “I’ll keep them home if I have to.”
Sersemis runs his family’s 15-year-old bakery in a residential neighborhood and worries that he will have to close it next year. Over the past two years, his sales have fallen 35 percent while ingredients cost 30 to 40 percent more. He takes home about 500 euros a month, down from 1,200 two years ago.
“People don’t have money to buy even bread,” he said.
Sales of wood for heating have soared 40 percent from last year, according to Alexis Tsekouras, a Kastoria wood seller. Because of limits imposed by the forestry service on the amount of timber that can be harvested, wood is imported from Bulgaria, he said.
Greece’s central government has cut the funding for heating schools by 60 percent, said Hatzisimeonidis, Kastoria’s mayor.
“All the mayors of every municipality in Greece are very angry about the situation,” Hatzisimeonidis said.
On Oct. 31, residents of Florina, an hour north of Kastoria, traveled to Athens to protest the lack of funds for heating oil, emptying buckets of ice in front of the parliament building. Florina schools closed for a day in December because the town didn’t have money to heat them.
At a Kastoria senior center in a small building next to the lake, several dozen grey-haired men play cards and pay 80 cents for coffee. Among them is Kostas Tsitskos, who said the suffering he sees now reminds him of the devastation caused by the German occupation in World War II.
“People were looking in the garbage for food then and they are now,” Tsitskos said. “In World War II, people were selling furniture for food. If the situation continues now, we will be selling our furniture.”
This winter, Tsitskos bought an electric heater for his 100 square-meter (1,076 square-foot) home and he turns it down at night. He has two thermometers and on a recent December day, the temperature was 17 degrees inside and 6 degrees outside.
If the weather is good, Tsitskos uses a walking stick to travel the few blocks to the senior center. The center is usually heated, although not well and not every day, he said.
“Sometimes we are heated with the heat from our own bodies,” he said.
Christos Tsitskos, his 43-year-old son, lives with his father. Christos owned a small fur business before closing it in the crisis. He now works at another company manufacturing pelts, earning 5 euros an hour. There are no buyers, he said.
“We’ll make 100 pelts and sell two or three,” he said. “We don’t sell anything.”
A veteran of the Greek Civil War, which was fought from 1946 to 1949, the elder Tsitskos worked in the fur industry in Montreal and New York before opening his own business manufacturing coats in Kastoria, retiring at 65. His wife died 15 years ago.
Tsitskos has relatives in Astoria, New York, who have considered returning to Greece to retire and he cautions them to stay in the U.S. He would leave if he could afford it, he said.
“I was expecting a different type of life,” he said. “There’s nothing that makes me happy. I’m living just to live.”
Even after 40 years in the trade, Tsitskos doesn’t have any furs to keep warm. The one fur coat he owned was sold years ago.
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