EU: Cyprus energy consumption depends almost fully on imported oil

Cyprus energy consumption depends almost fully on imported refined oil products and this makes the country one of the most vulnerable in the European Union in terms of security of energy supply, a European Commission occasional paper says.

According to the Commission document, under the title "Member States` Energy Dependence: An indicator – Based assessment", the share in gross inland energy consumption in Cyprus is the highest in the EU except for Malta which has a 100% share. The share of oil in the energy mix was 95% in 2010, one point less than 2006.

"Cyprus can be characterised as the most vulnerable country in terms of the external dimension of energy dependency because it had the second largest energy trade and current account deficit in 2011", the report says.

The energy trade deficit has increased between 2007 and 2011, it notes, adding that "the very high share of energy in total trade (currently almost a quarter) further illustrates the Cyprus` vulnerability to potential macroeconomic imbalances".

According to the document, in 2009, Cyprus recorded the steepest electricity price increase, between 20 to 30%, in the EU for both customer groups.

It said that in Cyprus, about 42% of imported oil products go to electricity generation, another 42% to transport including bunkers for international maritime and aviation transport.

"As electricity generation relies for 99% on oil inputs, all other sectors of the economy also depend indirectly very strongly on oil", it comments.

The Commission document also said that currently Cyprus has the highest electricity prices for industrial consumers and the third highest for households in the EU.