Cyprus fuel prices have surged in line with those abroad, but are still among the lowest in the EU, Energy Minister Natasa Pilides said on Friday, adding that based on the data before her, there were currently no grounds to set a price ceiling.
On March 14, Cyprus was the third cheapest among the EU 27 for 95 octane unleaded petrol (inclusive of tax), sixth cheapest for diesel and fourth cheapest for heating fuel.
The average price for unleaded petrol at the pump in Cyprus was €1.408 per litre after tax (€0.814 pre-tax) compared to the EU’s average of €2.021 (€1.082 pre-tax). For diesel, the price pre-tax per litre in Cyprus was €1.552 (pre-tax €0.964) compared to the EU 27 average of €2.028 (pre-tax €1.223). Heating fuel in Cyprus cost €1.099 (€0.892 pre-tax) compared to €1.758 (€1.365)
She was responding to a letter from Akel general secretary Stephanos Stephanou who said that despite the government cutting consumer tax on fuel, prices had not dropped and challenged her to carry out ‘real checks and clash with large private interests.’
Stephanou said the ministry – which is also responsible for consumer protection – was ineffective in addressing profiteering.
In her reply complete with tables and graphs, Pilides acknowledged that because of Russia’s invasion of Ukraine, there have been significant increases in prices of a number of products – including petroleum products – both internationally and locally.
The government had on March 3 moved to shield consumers by cutting consumer tax to the lowest rate permitted by the EU and this had significantly contained the first wave of increases, she said.
The consumer protection service had carried out checks and confirmed that these cuts were factored into both the wholesale and retail prices and concerned older shipments, Pilides added.
However, because of world development, new shipments came in at higher prices – reflected in the internationally recognised Platts Basis Italy index that is used for invoicing Cyprus’ import of refined fuel products.
“These increases therefore led to new, more expensive fuel shipments delivered to Cyprus cancelled out the reductions in the consumer tax,” she said.
A review of average retail prices in the EU’s 27 member states showed similar large price increases. In fact, checks by the ministry show that fuel here is among the cheapest in the EU both pre and after tax.
Pilides also noted that the retail price of fuel in Cyprus is determined by a number of factors, including the import price, stocks maintained by petrol companies on the day of import and the exchange rate of the dollar to the euro.
“All the above have been significantly disrupted recently, both by the repercussions of the pandemic and the war in Ukraine,” she said.
Taxes account for about half the retail sale price, which is why the government had reduced consumer tax so as to contain the negative repercussions of the war.
Checks by the ministry and studies by the University of Cyprus show that Stephanou’s concern that drops in international fuel prices are not reflected in local retail prices are unfounded, she added.
“In Cyprus, a small market where the only route is shipments by sea that usually do not exceed two or three a month, international reductions or increases are reflected with a delay,” she added.
The ministry has, as of March 15, installed a new, flexible software system to monitor fuel prices so as to upgrade checks as discussed with the auditor general’s office, she said and assured that the ministry was using all the tools and mechanisms available to protect consumers and competition.
Meanwhile, the consumer protection service was monitoring wholesale and retail prices. “At the moment, based on the data we have before us, setting a ceiling is not justified,” she said.
She assured Stephanou that the ministry did check shipment prices but said that the ministry could not publicise these figures as it would be criminal offence.