Filenews 3 September 2021
Fuel prices in Cyprus before taxes are comparable to Europe says the Ministry of Energy.
Specifically, in a statement, the Ministry states that, "One of the cherished issues for criticism of the Government, and in particular of the Ministry of Energy, Trade and Industry, is the level of fuel prices. Once again in recent days, due to the increase recorded in the price of fuel in the international market and therefore in Cyprus, parties and other organized groups have made announcements about profiteering in the retail sector of fuel, while claiming that the increases imposed in Cyprus are higher than in Europe. Most of the time the treatment they propose is the imposition of a maximum retail price, i.e. a ceiling".
The Consumer Protection Service of our Ministry, stresses once again, in response to the false impressions created, that through the Committee for monitoring the prices of petroleum products, it monitors on a daily basis both wholesale and retail sales prices and that at the moment, based on the data we have before us, it is not justified to set a ceiling. This can be deduced from the following data:
• The domestic fuel market in Cyprus is fully covered by the import of finished refined products such as gasoline, diesel and heating oil. Each fuel has its own variation in prices.
• For the pricing of finished refined products imported into Cyprus, the Platts basis Italy daily index is used for each type of fuel.
• The retail prices of petroleum products in Cyprus are affected by a significant number of factors, such as the import price of the products, the reserves held by the oil companies at the time of import of the fuel, the exchange rate of the dollar against the euro and the taxes imposed by the State. It is noted that a very important parameter for the formation of the price of motor fuels is the taxation imposed on fuels, which indicatively states that it constitutes about half of the retail selling price.
• Based on the existing Oil Price Monitoring Framework, information regarding the loads and stocks of the companies is collected and recorded, the calculations of the direct and indirect costs and the profit of the companies are updated, etc.
• The European Commission publishes every Thursday the factsheet with the average retail prices of petroleum products (Oil Bulletin), which are in force in the 27 Member States of the European Union on Monday of the same week. The publication of the newsletter takes place on the website https://ec.europa.eu/energy/en/statistics/weekly-oil-bulletin,which can be accessed by anyone.
He continues in the announcement that, "As shown in the updated graphs attached (gasoline 95 and diesel) and concerning the comparative prices, during the last year, of petroleum products in Cyprus and Europe before taxes, the prices in Cyprus are comparable to the European average. The picture that is formed after taxes is much more favourable for the Cypriot consumer, i.e. prices after tax are lower than in Europe".
The phenomenon of rocket and feather
As far as the complaint that the phenomenon of rocket and feather is in force in Cyprus, that is, the immediate, large and simultaneous increases in fuel at the same time as the increases are imposed internationally, and respectively the delay in price reductions when they fall, it should be noted that the phenomenon is not documented in the Cypriot market. This emerges from a study by the University of Cyprus that investigated the so-called Rockets & Feathers phenomenon in relation to fuel prices in our country, says the Ministry.
As evidenced by the data we are sharing today, we stand against profiteering at the expense of citizens and daily study the data and, where necessary, we are ready as a Ministry to intervene. At the moment, no intervention is required, the communication continues.
Finally, he notes that nevertheless, in our effort to create better mechanisms for monitoring fuel prices and taking into account the intensely changing environment of the oil products sector and the many changes that have occurred in the way oil import companies are marketed and operated, the Consumer Protection Service has launched a tender for the preparation of a Study on how to evaluate the Prices of Petroleum Products, together with a Computerized Framework for the Evaluation of Petroleum Products Prices. Completion of the project is expected in January 2022.
