Fuel prices at the pump should remain stable in the near term but will likely creep up in the coming weeks following Opec’s decision to cut oil production, an oil executive said on Tuesday.

CEO of Staroil Giorgos Petrou told CyBC that despite the Saudi move over the weekend, for the time being retail prices here would not go up until the next fuel shipments arrive.

“This was a Saudi move, as they decided that crude sales need to be at $90 a barrel for a healthy return on investment,” Petrou said.

Saudi Arabia, the powerhouse in Opec+, and other oil producers announced further oil output cuts of around 1.16 million barrels a day, in a surprise move that analysts said would cause an immediate rise in prices.

“Since yesterday [Monday] wholesale prices have risen by about 6 to 7 dollars a barrel. Today we’re at $85 a barrel (Brent crude). So far the price increases in oil derivatives are below the rise in Brent, they’re about 2 to 3 per cent higher,” Petrou explained.

“That’s because refineries had stocks with cheaper crude purchased from before. So the price rise – if we stay at $85 or go up to $90 – we will see it happen gradually.”

According to the exec, because most companies in Cyprus use the market average, a sudden spike in prices is unlikely.

“Certainly a small rise will be seen once new shipments arrive. But people shouldn’t panic. For example yesterday we noticed that sales at the pump shot up.

“The ambience is one of panic – some speak of oil going to $100 a barrel. Let’s wait and see. What we are seeing now is the usual reaction by the markets.”

Petrou said that the oil output cuts will be felt in May – a month away.

“So there will be a rise. I hope it won’t reach $100 a barrel, as that would significantly drive up prices at the pump.”

Russia tracked Saudi Arabia with its own production cut.

“Should the other Opec members follow suit, then inevitably we’ll see further price rises in crude.”

Asked how likely is it that crude might reach $100 a barrel, Petrou said: “Hard to tell, it depends what other oil producers do – we’ll have to wait for announcements over the coming days.”

He also remarked on how consumers tend to pay attention only when prices go up, but not vice versa.

“Petrol and diesel have dropped by about half a euro per litre. For us, that means about €30 million less in sales per month, because we sell about 60 million litres a month.

“Petrol used to be at almost €2 a litre, let’s not forget. Now we’re just under €1.5.”