Filenews 9 February 2024 - by Eleftheria Paizanou
Fuel and electricity prices that existed in 2022 will be among the main criteria for the Government's decision whether to extend for a few more months the government measures of subsidizing electricity and reduced consumption tax on fuel. Other criteria will be the fiscal strength of the state, inflation levels and geopolitical developments.
Obviously, for its decision, the Government will also take into account the decision that the EAC Board of Directors is expected to take today, in relation to the request submitted to CERA for a 6% increase in electricity tariffs. If the final verdict of the Authority's board will support the demand for 6% increases, it should be taken into account that in a few months the green tax on fuel, water and waste will be added to them, although the finance minister promises that compensatory measures will be implemented to eliminate the impact on households and businesses.
In relation to the evaluation of the government's support measures and the possibility of extending them beyond March, we are informed that the first exercise conducted by the technocrats of the Ministry of Finance showed that fuel and electricity prices are slightly lower today than those in force in 2022. Obviously, the competent ministry compares today's prices with those of 2022, as in September of that year the measure of subsidizing electricity was implemented for the first time by the previous Government and in March of the same year the reduction of consumption tax on fuel was implemented.
"F" compared the current fuel and electricity prices with those in the previous two years.
Unleaded petrol
According to the retail fuel price observatory of the Consumer Protection Service of the Ministry of Energy, yesterday the nationwide average price of unleaded 95 octane petrol was €1.357 per liter and last year in the same period it was €1.368 per liter. On February 7, 2022, the average selling price of 95 octane unleaded petrol was €1,378. Therefore, this year the selling price of unleaded petrol is slightly lower (2 cents) than in the period when the decision on reduced excise duty was taken.
Diesel fuel
In relation to diesel, the average price in Cyprus yesterday was €1.469 per liter, while last year in the corresponding period it was €1.57 per liter. In the same period in 2022, the average price of diesel was €1,456. The data shows that last year the price of diesel was higher than this year, while in 2022 the price was lower.
Heating oil
Yesterday, the average selling price of heating oil was €1,054 per litre. Last year in the corresponding period it was €1.149 and in February 2022 it was €0.978 per liter. And in this case last year the price of heating oil was more expensive than this year and this year it is lower than in 2022.
Electricity prices
In relation to electricity prices, between January and February 2024 the weighted average monthly fuel price is €846 per metric ton, while the cost of avoiding (fuel cost) low voltage is about 19.8 cents per kilowatt hour. According to EAC data, between February and March 2023, the weighted average monthly fuel price was €931 per metric ton, while avoidance/fuel costs were 22.7 cents. kilowatt hour. In February 2022, the weighted average monthly fuel price was €687 per metric ton and avoidance/fuel costs were 15.5 cents per kilowatt hour, which is about 4.3 cents cheaper than it is today.
Public finances are resilient
As far as public finances are concerned, a competent source told "F" that they have the ability to absorb for a few more months the cost of continuing the three specific support measures.
On the other hand, inflation has declined significantly, but the severe increases in many products and services over the past two years are still embedded in the vast majority of products.
Starting this week, the technocrats of the Ministry of Finance will conduct new exercises on paper, assessing fuel and electricity prices both in Cyprus and abroad. As we have been told, the ministry is expected to make its final decision before the measures expire.
It is reminded that the electricity subsidy expires at the end of February, the reduction in excise duty on motor fuels expires on March 3 and tax deductions on heating oil end at the end of March.
