Filenews 18 October 2022 - by Angelos Nicolaou
Fuel prices in Cyprus have risen again in recent days, as soon as the price of brent oil internationally exceeded $ 90 per barrel. Motor fuel prices have risen by three cents a litre in one week, while estimates suggest prices will move even higher in the coming period.
Now, the average price of unleaded gasoline is available at €1,473 per litre (17/10/2022) from €1,445 last week (10/10/2022). The price of diesel is also on the rise, selling at €1,804 per litre, compared to €1,781. The price of heating oil sold at €1,391 per litre is unchanged. The average price of the main fuels a month ago (12/9/2022), was €1,524 for gasoline, €1,836 for diesel and €1,416 for heating oil. On 1/1/2022 the price of unleaded gasoline was €1,316 per litre, diesel €1,418 and heating oil €0,936. In January 2021 the prices were: petrol €1,07, diesel €1,10 and heating oil €0,655 per litre. From today the dance of new increases opens: Diesel is up 9.5 cents a litre and heating oil 7 cents.
The price of fuel would be even more expensive if the government did not cut the price of excise duty in recent months. The reduced rates are valid until January 15, 2023 and concern a reduction of 7 cents per litre in the price of gasoline, 8.3 cents in the price of diesel and 6.4 cents in the price of heating oil.
Moreover, due to the situation with the war in Ukraine, Russia has reduced its gas production, but at the same time has increased its oil exports. As a result, due to the high demand observed in diesel, in Cyprus the price of diesel has far exceeded the price of unleaded gasoline. In particular, the difference in the price of the two types of fuel from 10 cents a litre more expensive diesel last January, came to be more expensive today than the price of unleaded by 33 cents a litre.
With the new increase that follows, the difference will reach 43 cents per litre. The sharp increase in demand for diesel has to do with the change in fuel use by power plants that have replaced natural gas with diesel, resulting in skyrocketing demand for oil.
A significant problem will be this year for those who use heating oil to heat their home. This is now one of the most expensive solutions due to the large increase in the price of oil. The price is prohibitive considering that the market decline of consumers in relation to wages has been significantly affected due to the ongoing conflict in Ukraine. The price of heating oil was €0,936 per litre in January 2022, while yesterday it was €1,391, meaning there is an increase within 10 months by 50%.
Therefore, in order to fill the tank of a house with 1,000 litres of oil, it now needs €455 more. With the new price you will need €525. If you need to fill the tank twice in the winter with the price not changing, you will pay €1,050 more compared to last year just to keep the house warm on cold winter days. The above applies provided that the price remains at its current level. It is noted that the price of heating oil in January 2021 was €0,655 per litre.
The rise in the international price of Brent oil was also contributed by the decision of the OPEC states to reduce world oil production by 1-2 million barrels per day from next November. As a consequence of the decision to reduce production, the markets were affected and already the price of oil is higher. OPEC countries argue that growing concerns about the economy and the expected slowdown in the growth rate of the global economy has led to more disruption in the balance between oil supply and demand.
With air conditioners, citizens will take it out in the winter
The Pancyprian Consumers Association estimates that this winter is difficult for household heating, based on heating oil prices that increased by 50% in one year, while a 50% increase is observed in the prices of firewood delivered to homes for wood stoves, as well as in pellet wood used in energy fireplaces.
Speaking to "F", the president of the Consumers' Association Marios Droussiotis, said that those who use wood stoves for their heating, if they do not have their own timber, will pay much more than last year to acquire firewood. He noted that for this winter he estimates that households will get fewer quantities of heating oil than in previous years due to its price. For each filling, he noted, the consumer needs to pay €500 more based on today's prices. He explained that turning on the wood stove heats a room, but it is much more economical. This way you will not turn on the heating that heats all the rooms in the house at once, but costs much more. By the same token, Mr. Droussiotis estimates that many consumers will resort to turning on air conditioners for their heating. With air conditioners you save even more, since you will be heating one or two rooms you need, rather than the whole house that will cost you more by turning on central heating.
In the market, however, there are many options for buying firewood that the consumer can pick up from the store, but as long as he has the right vehicle, or they are delivered to him at home with a double cab that costs 20% more. The Department of Forests also has firewood with receipt from the centres for the sale of firewood that the Department has (Stavros Psokas, Gialia, Panagia, Geroskipou, Polemidia, Platania, Athalassa, Larnaca, Dhekelia). The prices available to the Department of Forests for firewood are €80 for all forest species except latzia and acacia, green or dry cut for fireplaces. Latzia wood is available at the premises of the Department of Forests at €110 and acacia wood at €60 per spatial cubic metre [one double-cab].
As far as private licensed wood sellers are concerned, they sell wood at two prices. Those who own stores and the customer will pick them up close to them get about €20 less than having the double cabin delivered to their home. This is the most important advantage of private traders compared to the wood available to the Department of Forests, since at a small cost they transport it to the customer's home. For example, the delivery at home for pine or eucalyptus firewood costs about €120 per double-cab, lemon wood €160, olive wood €170 and beech and oak at €300. Pine firewood costs less, but it burns more easily, compared to other types of firewood that take longer to burn.
INTERVENTION
A reduction in excise duty is not enough
The price of heating oil has risen to such an extent that intervention by the government is required by supporting households and especially vulnerable groups, since especially this year things will be much, much worse than in previous years. The price has multiplied compared to last year and for every 1,000 litres the household pays €500 more, based on today's price. Drastic intervention is therefore needed to relieve households from the energy crisis. The horizontal reduction that applies to all consumers with the reduction of excise duty is not enough, especially for residents of mountainous areas, who will be even heavier this winter due to the energy crisis.
