EU COUNTRIES IMPOSE A CAP ON GASOLINE AND DIESEL PRICES - CYPRUS IS MONITORING AND WILL ACT ACCORDINGLY - Filenews 12/3 by Charalambos Zakos
The conflagration in the Middle East is causing a global energy shock. The price of oil is recording increases, while at some point it had even exceeded $100 per barrel, with the result that some governments have already moved forward with the imposition of a ceiling on fuel prices, in order to contain and limit the blow to their economy and their citizens from the rise in prices.
So far, Cyprus and the competent Ministry, i.e. the Ministry of Energy, have not made any decision regarding the imposition of a limit on fuel prices or another practice, such as the reduction of the tax, however, according to information received by "F", the issue remains open.
In particular, according to the same information, the issue is being monitored and, if necessary, as it was conveyed to us, relevant decisions will be made to contain prices.
Staggered increases are coming
It should be noted that, according to the latest data, the average price of gasoline in Cyprus is set at €1,378 per liter and €1,508 per liter for oil, recording an increase of about 2 cents compared to the prices in force before the conflagration in the Middle East.
However, it is important to note that these small increases do not appear to be related to the war, but due to initial concerns about a possible strike, which eventually happened. In fact, the president of the Pancyprian Association of Gas Station Owners, Savvas Prokopiou, warned that consumers should expect staggered increases in the coming period, especially if the conflict does not de-escalate soon.
Which countries imposed price caps
So far, Greece, Croatia, Hungary, South Korea and Thailand have implemented some kind of cap or limits on companies' profit margins on fuel prices.
In Greece, where a ceiling on the profit margin is introduced, the price of gasoline exceeded 1.85 cents per liter, while oil exceeded 1.82 cents per liter.
In Croatia, a ceiling has already been imposed, keeping prices at 1.5 per liter and €1.55 per liter for gasoline and diesel, respectively. Hungary followed the same tactic, with the ceiling being €1.51 per liter for gasoline and €1.56 for diesel.
A similar decision was made by South Korea, which decided to apply a price cap, with the price of gasoline in the country at around €1.28 per liter and oil at €1.3 euros per liter.
In Germany, it was decided that only once a day gas stations could raise fuel prices, to prevent speculation "The federal government will introduce this model as soon as possible, in light of the huge fuel price increases caused by the war in Iran," said Finance Minister Katerina Reiche. "It has been observed that fuel prices rise extremely quickly when the cost of oil rises, while, when costs fall, prices fall very slowly," the finance minister stressed.
Only under Antonis Paschalidis
Cyprus has only once imposed a ceiling on fuel prices. It was in 2010, during the presidency of D. Christofias and with Antonis Paschalides as Minister of Commerce. The maximum prices set caused great reactions among those involved and several gas stations either did not have enough fuel stocks or were operating poorly, resulting in queues and inconvenience to consumers.
However, the state has made moves in a few other cases that have stopped large increases in a different way.
The last example that the state decided to intervene to de-escalate fuel prices was in March 2022. Then, due to Russia's invasion of Ukraine, an energy crisis arose again, with the Government taking specific actions.
At that time, the Government, with the consent of the Parliament, had amended the Law on Consumption Taxes, in order to reduce the consumption tax on gasoline and diesel and heating oil. The reductions were close to 8.3 cents for motor fuels and 6.4 cents for heating oil.
This seems likely to happen in 2026 as well, in the event of large increases in fuel, since, as we mentioned above, the imposition of a price cap would affect, due to the specificity of Cyprus, imports and retail, resulting in other unpleasant issues.
