THE METEORIC rise in the cost of electricity is the latest burden to hit the consumer, spurred forward by increasing oil prices and a rising dollar.
Fixed since 1983 on the basis of £50 per metric tonne, but fluctuating according to the price of oil, Electricity Authority oil tariffs had enjoyed a record low in recent years.
In September 1999, they were pitted at only £47.60 per metric tonne. But in May 2000, the indicator weighed in at £82.45 per metric tonne, an increase of 73 per cent in just nine months.
"For the last couple of years, the prices have been very low – so we were enjoying very cheap electricity, but cheap oil is a thing of the past," said EAC head of public relations Tassos Roussos.
In January, the barrel price of oil was just $10 – in the first week of May, it was $25.70. Coupled with the rise of the dollar against the depreciating euro to which the Cyprus pound is pegged, the outlook is bleak.
Correspondingly the EAC relinquishes all responsibility for the price pressure.
At the end of September 1999, one pound bought $1.8297. Yesterday, the exchange rate fixed by the Central Bank was $1.5995 to the pound.
"The price of oil depends on international politics. It depends on what the Americans are doing, what the Arabs are doing. It’s an economic war. We can do nothing about the prices," said Roussos.
"I mean when prices go up everyone complains. What we’re trying to convey to our customers is that this is an inbuilt mechanism. We were lucky enough to have low prices for many years and we enjoyed cheap electricity. Now they have gone up and we all have to put up with it."
But for those struggling to foot bills, Roussos’ explanation is little consolation.
Ninety per cent of EAC consumers are private households – infuriated at having to dig deeper every two months.
"I think it’s outrageous. It puts an extra burden on the household budget, which, with three children and no help from the government whatsoever, is tight enough already," said one housewife.
Small relief comes in the June 1 scraping of the bi-monthly contribution to CyBC, adopted by the House Plenum last Thursday alongside the decision to raise VAT by two per cent.
In the past, the government has ploughed in petrol price surpluses to subsidise electricity costs, but that money has now run out.
Petrol-pump prices are controlled by the government precisely to protect the consumer from the vagaries of the international oil market.
When prices were low, the government surplus, earned by selling petrol for more than it was bought, was distributed back to consumers through electricity subsidies.
In January 1999 and from August to November last year, petrol surpluses channelled to the EAC subsidised prices in the region of 7-7.9 per cent.
But the surplus has petered out and Nicos Rolandis, Minister of Commerce, Industry and Tourism, told the Cyprus Mail yesterday that "there was no way the government could do anything on the question of electricity bills".
And he added that the EAC’s hands were further tied by the expense of building a new power station at Vassiliko.
It is still unclear which way the government will go over petrol prices – whether to raise them, or carry on subsidising them in an increasingly expensive market place.
Rolandis said the matter would probably be decided by the Council of Ministers on Friday.
