Filenews 3 October 2021 - by Dora Christodoulou
Cyprus has already lost its LPG train, and in Europe in general, this trend of traffic has not proved popular either. That is why, given the permanent difficulty caused by increases in the prices of conventional fuels, it is of the utmost importance that Cyprus this time anticipates the new trends and promotes electromobility alongside the rest of Europe.
This is stressed to "F" by the president of the Pancyprian Association of Petrol Station Workers, Stefanos Stefanou. There are currently some petrol stations that provide LPG, he explains, while in the Town Planning there were until recently 40 applications for such development, which are still awaiting approval. "Unfortunately, we missed the train, we are very late in time," he observes. "And we're talking about a huge investment in expenses, which those who make it I think will never cover."
"The new issue internationally now is the electrification of the car, not LPG. In Europe LPG did not succeed, its average use is only 5%. So we need to be proactive and push ahead and move on to go straight to the electrification facilities. We have already been caught up with electric cars. In many European cities, the fast electric car charging points are now available.
Mr. Stefanou points out that as far as fossil fuels are concerned, Cyprus is approximately in the middle of the list of 27 EU member states in terms of fuel costs based on the excise duty imposed by each state. In the cheapest countries are states such as Bulgaria, Romania and Estonia, while more expensive than Cyprus are large countries such as the Netherlands and Germany, some of which are also producers of crude oil. It reiterates that the price has to do purely with the taxes imposed by each state, the consumption tax, the VAT, but also with biofuel, which has now entered our daily lives, increasing fuel prices.
The EU's decision to introduce biofuel into diesel, as an environmental protection measure, started from 2% of the amount of oil, we moved to 5%, 7% and 10%. The production of a litre of biofuel costs more than it costs a litre of diesel, so you are actually adding to the oil a more expensive product which will normally increase the selling price.
The president of the petrol station owners reiterates that fuel price hikes are a misunderstood issue by the consumer public. They have nothing to do with the actions of either the service station owners or the fuel companies, he explains: "It is purely a product that comes imported to Cyprus, with specific taxes and the profit margin that exists is about 14-14.5 cents. Of this amount, five are given to the service station owners and the rest to the companies, which bear the cost of transport and the cost of renting the land of the service stations. So let everyone understand that it is about state and imported tariffs."
Nor is it substantiated that the increases fly like a rocket, while the decrease falls at the rate of feather, observes Stefanos Stefanou. A scientific study by a professor at the University of Cyprus shows that the rates of increases and decreases are identical.
"The merchandise comes to the big fuel tanks of Larnaka. Customs keeps a record of the stocks of each product in each tank. From these stocks comes the average cost per litre. When now comes a load with an increase of 5 cents per litre, for example, this quantity is put into the tank with the rest of the product that is already inside. It does not mean that this whole product goes 5 cents up, it aggregates with the average cost that existed in the existing product in the tank and goes accordingly above, that is, an increase of 2 cents can come out.
The same is done in the case of reduction. The difference is that if the citizen hears eg 10 cent reduction, expects to have in his car 10 cents reduction. It's not like that, it's going to calculate again with the average cost as we said about the increase, so the reduction will go to 5 or 4 cents and not to 10, that's the process."
The variation in the profit margin of the petrol station owner, points out their president, ranges from one to one and a half cents per litre. Some, however, he observes, act in a way that is destructive to them, even dragging others along.
These service station owners, stresses Stefanos Stefanou, thinking that if they reduce their price to 3 or 3.5 cents, they will get customers, they do not realize that they are being driven full-time to a padlock. He argued that the issue should not be approached according to where are the cheapest and where are the most expensive petrol stations. On average, the citizen pays €200 per month in fuel. This means about 150 litres and with one cent difference per litre, it means one and a half euros per month difference. For one and a half euros now, what reasonable person will sit and think where to go to save it and make kilometres of journeys, when next to him there is a service station?"
Mr. Stefanou says that when he assumed the presidency of the Association in 2007, there were 240 petrol stations operating all over Cyprus. Today there are 315 petrol stations. The fuel market pie at the time was a billion litres of fuel a year. This means that each service station then sold 4.1 million litres on average.
Today the pie has been reduced on the basis of the figures, to 850 million from one billion. Dividing it by the 315 petrol stations, we find that the average per service station per year fell to 2.7 million litres. One and a half million litres have been lost for each service station, which if we multiply it by five cents of the station owner's profit per litre, we find that each service station has now lost €80,000 in income due to the increase in petrol stations and the reduction of the market.
This situation, explains the president of the service station operators, contributed to the acquisition of many petrol stations by the oil companies themselves. Whereas 10 years ago there was no service station owned by the companies, but only by the service station owners, today the ever-increasing number of petrol stations - which are not doing well financially - are being pushed for takeover by the companies.
They are those petrol stations that would be closed down because they had no business to make a profit, he stresses, and they were simply bought by the companies. But now that the companies have got as many petrol stations as they needed, all the petrol stations that are now at risk of bankruptcy, they will simply be closed down. If one looks at the tables that are periodically published with the prices per service station, one will notice, stresses Stefanos Stefanou, that always the cheapest gas stations are the corporate ones. The stations bought by the petrol station owners by the oil companies sell cheaper because the company has its own kiosks, has its share and therefore can sell cheaper by one and a half cents.
