Greek PM announces deal to cut fuel prices over the summer

ATHENS, July 10 (Reuters) - Greek Prime Minister Kyriakos Mitsotakis said on Friday that gasoline and diesel costs for consumers would fall during the summer following a government deal with oil refineries aimed at taming the impact of the Iran war on fuel prices.

Greece has recovered from a 2009-2018 debt crisis that forced wage cuts as part of bailout austerity measures, and Mitsotakis' government has cut taxes and raised salaries since it took power in 2019.

But rising consumer prices exacerbated by the conflict in the Middle East have strained household budgets in Greece, where purchasing power still trails the European average.

Responding to a question about the cost of living by an opposition lawmaker, Mitsotakis told parliament Greece's two major oil refineries had agreed to price reductions until the end of next month.

"Fuel prices will drop by 10 cents per litre and diesel fuel will drop by 5 cents per litre," he said, adding that the relief would be temporary until the end of August. 

Fuel consumption typically climbs during the summer months when many Greeks travel to the countryside and the islands for their holidays.

Earlier this year, Mitsotakis' ruling New Democracy party, which holds a majority in the 300-seat parliament, announced subsidies for fuel and fertilisers and discounts on ferry tickets.

It has also promised cheaper food and other essential goods from September following government-led consultations with domestic suppliers and supermarkets. 

A parliamentary election is due next year.

(Reporting by Angeliki Koutantou;Editing by Helen Popper)