Cyprus:Authorities Fuel Price Caps Create Stand Off- UPDATE

Owners' association President Stefanos Stefanou said all 280 privately owned gas stations island-wide have reopened and he apologized for the inconvenience to motorists.The stand-off between the Commerce Ministry and petrol station operators over capping fuel prices continues.

Petrol Station Owners’ Association head Pambinos Charalambous said that the retail price-cap of 95 cents a litre for 95-octane petrol, 97 cents per litre for 98-octane petrol, and 87.5 cents per litre for low-sulphur diesel represented a 45 per cent cut in the petrol stations’ gross profit, when the real problem was high wholesale prices. Charalambous said: “If the minister wanted to cap prices, he should have capped wholesale prices as well, so that we are all covered.”

EKO-Hellenic Petroleum Managing Director Akis Pegasiou said that the government’s price-capping order was against the law. He said such orders are only allowed in situations where increases in retail prices are “significant and excessive”, and questioned whether “the difference of one cent between the price-cap and the previous price” was excessive, especially “during a period when global prices are rising”.

The number of fuel service stations open on Wednesday last  dropped to 33 according to the Commerce Ministry’s list compared to 46 on Tuesday. Of these, 14 were in the Nicosia district, 14 in Limassol district, three in Larnaca and two in Famagusta district. Service-station operators appear to be fulfilling their pledge to service emergency vehicles.

Now it looks like a deal has been done where new legislation will be brught in and affect wholesale prices but not the margins of fuel retaielrs.  However, any such measure on fuel price control would be subject to approval of the relevant EU institutions, which is by no means certain.

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