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Bill putting ceiling on prices at the pump heads to plenum

opec oil prices fuel petrol station

Main opposition party Akel said on Tuesday a bill allowing for a cap on the price of fuel products would head to the House plenum later this week.

The decision to forward Akel’s legislative proposal to the plenum was taken by lawmakers during a closed-doors session of the House commerce and energy committee.

Speaking to the press later, Akel MP Costas Costa said their proposal is intended to tweak the current legislative framework regarding the imposition of price ceilings by the government.

“What we hope now, is that all the parties will rise to the occasion, and that none will ask for a postponement of the vote, as that would push the bill back to September,” he noted.

Costa asserted that what is occurring now can only be described as profiteering. Over the past few weeks, despite the price of crude oil dropping back to about $100 a barrel, in Cyprus fuel at the pump has kept going up.

“We want to give the energy minister the means to protect consumers,” added Costa.

The legislative proposal empowers the minister of energy and commerce to set a ceiling on fuel prices – on some or all fuel products – in the event that “especially difficult economic conditions prevail which dictate reining in price increases in order to protect consumers.”

Under existing law, the state may impose a price cap only in the event that ‘profiteering’ is established – and its duration is left to the minister’s discretion. But Akel’s bill would allow the minister to issue a decree – for a period of up to 45 days – setting a ceiling on prices of certain products where the prices “are at a level higher than justified by global and domestic conditions.”

Before doing so, the minister would take into account global market conditions, fuel companies’ import costs, as well as the profit margins of importers, distributors and gas station owners.

Some have warned of shortages as a consequence of tinkering with the market mechanism.

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