Filenews 30 April 2022 - by Angelos Nikolaou
Electricity bills are constantly inflating and according to what the Electricity Authority of Cyprus itself is signalling, in the coming months there will be an additional increase of 16%. Households and businesses cannot cope and expect the government to intervene decisively to stem the tsunami of price rises.
Besides, households in Cyprus pay to a much greater extent than the rest of the Europeans for the skyrocketing prices as a result of the energy crisis, something that is confirmed by the official data of the EU's Statistical Service on household electricity prices in the second half of 2021, compared to the second half of 2020, with the largest increase recorded in three states: Estonia (+50%), Sweden (+49%) and Cyprus (+36%).
The Cyprus Consumers' Association is calling for the setting of a maximum price for electricity. In a letter, the President of the Association Marios Drousiotis, referring to the Setting of Maximum Wholesale and Retail Prices in Special Cases Law of 2012, notes that the Minister of Energy may by decree impose a maximum price on a small number of products for a specific period of time which can be renewed. Among these products is electricity.
Specifically, article 4 of the relevant law states: "4.-(1) Notwithstanding the provisions of article 3, the Minister may issue a decree setting, for a period up to forty-five (45) days, maximum selling prices for all or some of the products listed in the Table of the Annex, when the level of prices, in which those products are marketed in the Republic, are at an excessively higher level than is justified by international and domestic conditions, as well as when particularly difficult economic conditions prevail on the market which require a moderation of the increase in prices of basic consumer products, as well as for the protection of consumers, in particular when the profit margin of traders is too high'.
The Association considers that it is necessary to immediately issue a decree of the Minister of Energy setting a maximum selling price for electricity. It proposes features such as the additional increase of 16% imposed by the EAC, to be frozen by a decree of the Minister of Energy, by which to set as maximum prices for the sale of electricity those currently in force.
Asked about this, the deputy prime minister. director of the Consumer Protection Agency, Antonis Ioannou, said that indeed the legislation includes electricity in products that the government can impose a cap. However, he notes, the Ministry of Energy considers that in order for this to happen, the conditions set out in section 4.1 of the relevant law must be met. Indeed, he said, particularly difficult economic conditions prevail in the market. He adds, however, that the prices available to the electricity are justified under the current conditions.
Furthermore, he said, despite the existence of the legislation, there may also be legal issues since it is the responsibility of CERA for electricity pricing issues. To address the energy crisis, he noted, the government proceeded to reduce the consumption tax on gasoline by 7 cents per litre, and on diesel 8.3 cents per litre. Furthermore, he noted, the VAT rate on electricity has been reduced to 5% for vulnerable consumers and 9% for other households. He added that this practice serves all domestic consumers, without interference in the market.
