Rolandis urges motorists to save fuel

THE government will have to pay fuel companies another £14 million in subsidies to meet its commitment to cover 60 per cent of oil price increases, Commerce Minister Nicos Rolandis said yesterday.

Consumers are burdened with the remaining 40 per cent in the form of higher pump prices.

Speaking after a meeting yesterday with fuel company directors, Rolandis said £14 million had already been paid to the companies for the first four months of the year, while a further £14 million would have to be coughed up for the period between June and September.

The companies need the money to place orders and keep the island tanked up.

Fuel companies have in the past complained that the government has been late in paying the subsidy, prompting banks to refuse them credit.

The government needs House approval to release the extraordinary funds.

But the minister said the subsidies did little to encourage consumers to save on fuel, adding Cyprus was one of only a handful of countries, which experienced an increase in fuel consumption during July and August. Cypriot motorists pay some of the cheapest fuel prices in Europe.

"Others save fuel, but because we do not pay the difference directly and a big part is paid by the state treasury, we do not care about saving fuel," Rolandis said.

But Rolandis pointed out it was the same taxpayers who’d ultimately foot the bill for the subsidies.

"Consumers do not seem to care if the money does not come straight from their pockets," he told the Cyprus Mail.

Rolandis pleaded with the public to save fuel, adding his ministry was studying various plans to encourage lower consumption.

However, there was no plan to increase the consumer’s share of the bill because of high fuel consumption in winter months, Rolandis said.

The fuel price regulating mechanism set by the House would be in place until June next year, so no increase in the consumer’s share of price rises should be expected before that, he added.

The mechanism operates against a benchmark Brent Crude Rate of Rate of £16.97 ($25.96) per barrel. Fore every increase of £1.75 per month, pump prices clock up one cent per litre.

The House of Representatives passed the mechanism to bypass lengthy political arguments that have dogged price rises in the past.

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.