THE HOUSE of Representatives yesterday refused to consider a Cabinet proposal for pump price rises, but parties promised the burning issue would be debated at next week’s House plenum session.
Faced with having to subsidise oil imports because of the sky-high price of crude and a weak pound, the government has been trying since the turn of the year to get parliamentary parties to back unpopular pump price rises.
The government wants to raise the price of petrol by four cents a litre and of diesel by two cents a litre.
The issue was again discussed by the Cabinet yesterday morning, and reports after the meeting suggested Ministers were confident parties would back fuel price rises at yesterday afternoon’s weekly plenum session.
But this government optimism evaporated following a meeting a party leaders ahead of the plenum session. Opposition parties Akel and Diko said they needed more time to consider a compromise proposal tabled earlier this month by President Clerides.
Commerce Minister Nicos Rolandis put a brave face on things, saying he was hopeful the issue would be resolved next week.
"The proposals will be studied by the two parties (Akel and Diko)… and I believe there will be decisions next Thursday," the Minister said.
House president and Diko leader Spyros Kyprianou agreed that next Thursday would be fuel price decision day. "Everyone has promised that next Thursday morning, at the meeting of party leaders here, various proposals will be tabled and we will arrive at a final decision," Kyprianou said.
Details of Clerides’ compromise package have not been announced, but reports suggest it provides for a shake-up of the whole fuel price fixing system. Pump prices would be automatically adjusted to track crude oil prices rather than having to be set by Parliament. The government would also re-examine a gentleman’s agreement with oil importing companies, which guarantees them a 12 per cent profit. The arrangement has been criticised by opposition parties.
Akel is expected to discuss the Clerides package today, while Diko will look at it on Tuesday.
The government is desperate to avert a fuel crisis.
With reserves on the island almost dry, oil importers are threatening not to import any more crude unless their income is boosted in some way. The companies say their takings have been down by an average of £5 million a month since January.
With Parliament refusing to approve fuel price rises, the government has been forced to subsidise fuel imports since the turn of the year, draining some £14 million from already depleted state coffers.
The state is loath to continue these subsidies, which would cost an estimated £50 million by the end of the year.
