Cyprus Mail
Business Cyprus

Syria conflict fuels petrol price rise

By Poly Pantelides

CONSUMERS should expect an across-the-board hike in fuel prices this week because crude oil prices are being pushed up by the conflict in Syria, the head of the petrol stations’ owners association has said.

Stephanos Stephanou said that one by one, petrol companies have been raising prices in response to increases in crude oil prices with all four companies expected to fall in line within the week.

“Consequently, prices will be raised by petrol station owners,” he said. Prices for diesel fuel and unleaded 95 and 98 should go up by between 2.0 and 2.5 cents per litre, Stephanou said.

He said the cost of diesel would go up by about €1.43.

“For ten days now we have been constantly watching international market prices skyrocket because of Syria,” Stephanou said. “So it was expected that with the first fuel shipment purchase from companies they would carry the increase over to consumer,” he said.

Petrol station owners normally make a profit of four or five cents per litre of fuel sold and are free to set whatever prices they want which includes making a choice to reduce profit margins. They almost always choose to increase prices when international fuel prices go up.

The auditor general has flagged fuel prices in her 2011 report and said that a survey by her office revealed “prices were higher than they should have been”. And the commerce ministry has previously said petrol stations are slower to drop prices than they are to raise them.

Back in February when prices had increased again before dropping later, the head of the consumer’s union Loucas Aristodemou scolded fuel companies for having a guaranteed profit “with no risk”. Aristodemou said that factors such as what stock companies keep, how much they pay for fuel and international price fluctuations was the responsibility of the companies and not of the consumer.

The commerce ministry has previously talked of setting a price cap but this has not taken place.

Fuel companies Exxon Mobile, Hellenic Petroleum (EKO), Petrolina and Lukoil were fined almost €43 million by the competition commission in 2009 for “concerted practice”, i.e. for informally and tacitly coming to an understanding to influence the market. The violations took place between October 2004 and late 2006, but the Supreme Court overthrew the fine decision on a technicality. The watchdog’s chairman had been appointed illegally, the fine was rendered invalid.

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