Increases in basic salaries in January through the Cost of Living Allowance (Cola) are an absolute necessity given the current spike in the price of energy, goods and services, unions said on Wednesday as a new blow to consumers emerged.

The Cyprus Chambers of Commerce and Industry (Keve) slammed newly announced hikes in charges by one of the Limassol port companies on Wednesday, which is also likely to have a knock-on effect on the supply chain.

Keve said it had been informed by its members that one of the management companies at the port, DP World Limassol had told businesses there would be increases in charges from February varying between 4 per cent and 96 per cent, depending on the service.

It said the European Producer Price Index, according to Eurostat, showed an increase of 25 points from November 2021, which does enable port management companies, based on the contract they have with the state, to impose increases in their charges.

However, Keve said the increases being imposed are too high.

“We consider it completely untimely to raise the issue of increases at this time when we all recognise the state of trade and business from the beginning of the pandemic to date with continuous increases in energy costs and beyond,” it said, adding that the higher charges would have to be borne by Cypriot businesses and households.

It calls for an immediate meeting with stakeholders on the issue.

Keve also said that since Cola had been fixed at 1.27 per cent – half of the 2.54 per cent rise in the consumer price index for 2021 – the hikes at the port should not be in the region of 15 per cent on average.

Both Peo and Sek unions on Wednesday called for the index-linked allowance to be fully restored at a time when there are huge price increases, saying the transitional period ended in December 2021.

Cola was scrapped during the economic crisis in 2013 and re-introduced on a transitional basis in 2018 as an annual rise under a new formula rather than twice a year as it had been previously. Cola also only applies to sectors with collective agreements. The agreed transition period ended in 2021 and the unions now want it fully restored. Under the transitional deal, in real terms, an employee with a basic salary of €1,500 will receive around €19 a month from January but not another rise in July, which would have applied under the old Cola system.

In statements to CNA, Sek general-secretary Andreas Matsas said Cola helps maintain purchasing power of wages. “Today, with the inflationary trends we are seeing, Cola is a blessing,” he said, but it needed to be fully restored.

Also speaking to CNA, Peo chief and former labour minister Sotiroulla Charalambous said that rising prices and inflation loomed large at the moment.

“This on the one hand confirms the importance of Cola for employees and the need for it to be fully implemented,” she said.