By Constantinos Psillides
FUEL companies will be lowering fuel prices to reflect the global drop in oil prices, Star Oil manager Giorgos Petrou said yesterday, explaining that the price reduction was due to fuel shipments arriving two days ago that were bought at a lower price.
Speaking on both Sigma TV and CyBC radio, Petrou said that his company will cut prices by 2.3 cents a litre for petrol and 2.7 cents for diesel. Asked whether other fuel companies will follow suit, Petrou said, “I’m not sure, but I think so.”
Fuel companies have been under fire for their high prices since last Friday, after the consumers’ protection group Consumers and Quality of Life Union (CQLU) threatened to sue the government for allowing fuel companies to charge high prices. The group argued that fuel companies maintained high prices despite a drop in world oil prices, tolerated by the government in order to collect more taxes.
The CQLU said that prices should be 12 to 15 cents lower.
The fuel companies claimed that high prices were due to losses on the euro-dolar exchange rate, offsetting any gains from buying oil at a lower price.
Energy minister Giorgos Lakkotripis rejecting the claim that the government turned a blind eye while fuel companies profited.
Star Oil’s manager argued that fuel companies buy refined fuel and don’t deal in crude oil. “Adding to that are operational costs and other expenses. So, you see, fuel companies in Cyprus don’t necessarily charge according to the global oil prices,” argued Petrou, adding that one shouldn’t confuse fuel companies’ prices with fuel station prices. “Fuel station prices can vary. We urge the public to seek out cheaper pumps,” he said.
Petrou dismissed the claim that fuel companies responded to overwhelming public pressure to lower prices.
Loukas Aristodemou, the head of the consumers association, was not convinced, telling CyBC radio that the fuel companies are trying to placate the public with a minimal reduction and that the proposed cut still doesn’t reflect world oil prices.
Meanwhile, the former head of the Competition Committee (EPA) Costakis Christoforou scolded the current EPA head Loukia Christodoulou for not intervening, saying that “it takes guts for a public sector employee to do his job and stand up to injustice.”
Christoforou made headlines in September 2009 when he fined four major fuel companies €43m, accusing them of price collusion and unfair trade practices. The fuel companies took the case to the Supreme Court and in May 2011 their lawyers successfully argued that
Christoforou didn’t meet the necessary qualifications to head the Competition Committee and thus any decisions he made were void. Christoforou resigned shortly after.
“We received threats then. People wanted to stop us from doing our work, but we saw the probe through. What happened to that probe?” wondered Christoforou.
The current EPA head rejected Christoforou’s claims, saying that the Committee is understaffed and does everything it can to cope with the increasing workload. “As far as the probe on fuel companies, we are currently investigating the matter, but I cannot tell you exactly where the investigation has reached,” she said.
Christodoulou explained that the Competition Committee is not a pricing body and that it can only intervene in matters regarding competition.