Cyprus Mail
Business Cyprus

Watchdog launches probe into fuel prices

By Eleni Courea and George Psyllides

The competition watchdog (EPA) launched an inquiry into fuel prices on Wednesday, as fuel station owners threatened to shut their outlets indefinitely with their main grievance apparently being the licensing of new pumps.

EPA announced that the sector inquiry that will cover the entire supply line.

The watchdog said it appeared that the drop in fuel prices in Cyprus did not reflect the current fall in the international price of oil.

“The general feeling among the public … is that prices rise rapidly when import costs rise and drop slowly during reductions, known as the rockets and feathers effect (rise like a rocker and fall like a feather,” EPA said.

The pump station owners association also said that it had disagreements with the fuel companies, which remained unresolved despite negotiations with the authorities.

The date of the shutdown will be decided later.

They also complained about the bad press they have been getting concerning the high pump charges when, as they claimed, it was the companies and the state that set the prices.

The ongoing debate regarding the prices prompted the competition watchdog (EPA) to launch an inquiry, announced on Wednesday afternoon.

The pump owners said it was a well known fact that fuel prices were set “with the blessing” of the energy and trade ministry and the fuel companies. The ministry rejected the claims.

But it appears that their main grievance is that the government is doling out licenses for new pump stations.

The chairman of the association, Stephanos Stephanou, claimed that people who had been denied licenses applied to the derogations council, which allowed them to build.

The head of the council, Takis Pettemerides, said that within the last three years, only four permits had been issued, while three applications had been denied.

Two applications are pending before the council.

Pettemerides rejected suggestions that the permits had been issued to “cronies” and “prominent” individuals, saying that the criteria used were strictly technical.

However, Stephanou claimed that five such licenses were issued in 2014 alone.

Insisting that “there are laws that must be obeyed,” Stephanou said that Cyprus has 290 pump stations in operation, while one study showed that there should be 177.

If the practice of issuing new licenses continued, those 110 extra stations will have to close down, he said.

The association also bemoaned the petrol companies’ policy of operating their own stations and selling fuel to commercial clients, while the competition commission turned the blind eye.

Stephanou urged people not to panic as the date of the closure has not been decided yet. It will be decided by the association’s general meeting.

The energy and trade ministry rejected the association’s claims, saying it had nothing to do with pricing, which was regulated by the market.

“The ministry’s main task is to monitor the prices and inform consumers,” a written statement said.


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