President seeks to curb energy costs

3 mins read

President Nicos Anastasiades will hold an emergency with ministers and officials from energy authorities in a bid to bring down galloping electricity prices amid an inflation tide.

Anastasiadis has called for a meeting on Friday at the Presidential Palace to find ways to reduce the price of electricity, with the participation of the ministers of finance and energy, the Regulatory Authority (CERA) and the Electricity Authority of Cyprus.

The meeting comes amid protests from consumer associations and unions over the high cost of energy, opposition parties tabling demands for the reduction of taxes burdening electricity, including VAT on the cost of purchasing rights for greenhouse gases.

This is what opposition centre-right DIKO proposes, along with main opposition AKEL’s demand for VAT on electricity consumption tax to be abolished.

Friday’s agenda will also include the possibility of taxing the profits of some photovoltaic parks.

However, this taxation will not generate significant revenue that can significantly deflate consumer charges.

Critics have accused authorities of allowing companies producing electricity with photovoltaic parks to profiteer.

Recently, the government introduced an 11-cent ceiling on the price of a KW of electricity sold to the island’s electricity by owners of photovoltaic parks.

The Cyprus Consumers Association said this is encouraging profiteering, as companies had initially asked to be compensated with 8.5 cents for every KW sold.

Friday’s meeting will also focus on the more efficient use of state revenues from the auction of greenhouse gas emission allowances so that these annual revenues go towards the relief of EAC customers and not financing state-related activities in the energy sector.

Around 70% of electricity bills are affected by the price of oil internationally and the greenhouse gas rights purchased by the EAC.

The spike in the price of electricity has put Cypriot families in the poverty zone.

Christina Papadopoulou, spokesperson for the EAC, told Politis daily: “Electricity prices have gone up by 48% in Cyprus, compared to the same period last year”.

She explained that a family of four now pays on average €241 a month, from €174 last summer.

Electricity bills were reduced following a government decision to lower the VAT on household electricity bills from 19% to 9% for November 2021 to April 2022.

Prices have continued to soar since then.