THE GOVERNMENT has decided to delay new fuel hikes after a fall in the price of crude oil, Trade, Industry and Tourism Minister Nicos Rolandis said yesterday.
Speaking after a meeting with the representatives of fuel companies, Rolandis said the companies thought pump prices did not correspond to the crude oil price, adding his ministry has already briefed the House on the situation.
“But because the price of crude has dropped in recent days to $24 dollars (per barrel) from $26, we have decided to wait for a few more days in order to have a safer view of the situation,” Rolandis said.
The minister said he understood concerns by the House and people, since it was not long ago that prices went up, but stressed that the international price was still high compared to what was being charged on the island.
The House in April decided to increase fuel prices by 2.75 cents (VAT included) per litre, despite a government proposal for a 4.4 cent rise.
“Due to this, the companies are worried since there is a delay in receiving the money owed by the government, which results in a lack of cash flow,” Rolandis added.
Rolandis said that the loss to the public coffer since February 1 has reached £2.5 million, and it could not be covered with current pump prices.
The deficit is the result of a government agreement with petrol companies to subsidise their profits in return for keeping prices low.
Rolandis said the meeting also discussed the imminent liberalisation of the island’s fuel market, adding that the matter would soon be discussed at the Cabinet.
“We also discussed the issue of moving all fuel installations from Larnaca, since all the companies would move along with the (state) refinery,” he added.
The minister said the refinery’s move was expected to be completed by 2007.
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