Price ceiling on pump prices ‘not justified’

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The Energy Ministry will not impose a price ceiling on hiking pump prices, despite almost breaching the €2 a litre barrier, as it finds no evidence of profiteering.

Responding to MPs requesting that a ceiling be placed on fuel, the Commerce and Energy Ministry said that authorities had not spotted evidence of profiteering by petrol stations, which would justify the introduction of a ceiling.

Arguing that the spiralling cost of living has brought Cypriot households to their knees, MPs asked the Energy Ministry to intervene, taking additional measures to protect consumers.

In a letter to the House, the head of the ministry’s Consumer Protection Service, Constantinos Karagiorgis, told MPs that market data does not support claims of foul play.

He explained the Minister of Energy could issue a decree setting maximum selling prices for all or some of the petroleum products for up to 45 days when there is evidence prices are at a much higher level than justified by international and domestic conditions.

This, according to the ministry, is not the case.

The ministry found that prices were in harmony with the Platts price index fluctuations used for refined fuel products.

Karagiorgis said the average retail fuel prices in Cyprus for 2022 are lower than in other European countries.

He argued that in 2021 Cyprus was the sixth cheapest country for 95 Octane petrol, 15th for 98 Octane petrol, and 12th for diesel and heating oil.

For 2022, despite the increases, Cyprus ranks 5th, 8th, and 6th, respectively.

He argued that the domestic fuel market in Cyprus is completely dependent on the import of refined products, such as petrol and diesel.

The daily index “Platts Basis ltaly” calculates the prices of refined products imported to Cyprus; it is influenced by the demand and supply of refined fuels in the broader Mediterranean region.

Karagiorgis said that while the price of crude oil has increased by 40%, according to the Platts index, prices for Unleaded 95 have increased by 37%, and Diesel prices increased by 74%.

The official referred to a decrease in the euro’s purchasing power by 8% compared to the US Dollar, emphasising that the oil market is denominated in USD.

According to the Commerce Ministry’s Consumer Protection Department, the average price of 95 Octane petrol on Monday was €1.749 per litre, 98 Octane €1.802 and Diesel €1.838.