Government has no plans to hike fuel prices

By Hamza Hendawi

THE government does not intend to raise fuel prices but will order a “limited” hike if it becomes necessary, Finance Minister Christodoulos Christodoulou said yesterday.

Fuel prices are set by the government, which reviews them every six months to accommodate any fluctuations in world oil prices. The government also sets a ceiling on how much profit oil companies operating on the island can keep, with any surplus going to the treasury.

Cyprus is not an oil producer and imports its entire oil needs, either in crude to feed its sole refinery in Larnaca, or in oil products. The refinery’s output of 30,000 barrels a day meets 80 per cent of domestic consumption, while the balance is imported.

Speaking to reporters after a ceremony marking the 70th anniversary of the Civil Servants Union (Pasydy) yesterday, Christodoulou said: “Although winter is upon us, the price of petrol will not increase and if it does increase it will be at a limited level.”

It was not clear on what grounds he was basing his link between the onset of winter and a possible rise in fuel prices or why he thought a “limited” rise in domestic oil prices might be necessary.

Fuel consumed in winter is normally bought as early as mid-summer.

The Finance Minister’s remarks also coincided with a sharp fall in world oil prices after international market traders took fright at an OPEC deal reached over the weekend to raise the cartel’s output ceiling by 10 per cent.

The fall was accelerated by the recommendation of UN Secretary-general Kofi Annan that Iraq, under sanctions since its 1990 invasion of Kuwait, be allowed to increase the amount of oil it sells to buy food and medicine.

Benchmark North Sea Brent blend crude oil ended down 78 cents at $18.17 a barrel in London on Monday after dipping briefly below the psychologically important $18 level. This compares to this year’s average of $19.50 a barrel.

The Cyprus Mail is the only English-language daily newspaper published in Cyprus. It was established in 1945 and today, with its popular and widely-read website, the Cyprus Mail is among the most trusted news sites in Cyprus. The newspaper is not affiliated with any political parties and has always striven to maintain its independence. Over the past 70-plus years, the Cyprus Mail, with a small dedicated team, has covered momentous events in Cyprus’ modern history, chronicling the last gasps of British colonial rule, Cyprus’ truncated independence, the coup and Turkish invasion, and the decades of negotiations to stitch the divided island back together, plus a myriad of scandals, murders, and human interests stories that capture the island and its -people. Observers describe it as politically conservative.