THE GOVERNMENT said yesterday it had still not decided on the timing of new fuel price hikes, which it described as “inevitable”.
Rising crude oil prices means the state budget has to be compensated by more expensive fuel at the pump, the government insists.
According to Government Spokesman Kypros Chrysostomides, the next price hike will be greater than that initially envisaged in a government proposal that was thrown out last week in the face of stiff opposition from parliament.
The bill, which was never tabled, provided for an immediate 0.8 cent price increase, instead of waiting for mid-December, the end of the traditional six-monthly period when prices are reviewed. The government argued this pre-emptive move would ultimately benefit consumers, who tend to purchase heating fuel much earlier in anticipation of winter.
Chrysostomides yesterday took the government’s argument one step further, noting that the rejection of its proposal would necessarily mean a greater one-off price hike in the future.
But the logic was lost on deputies opposed to the bill, particularly from opposition DISY, which slammed the government for its slapdash handling of the matter.
DISY boss Nicos Anastassiades yesterday wondered what was the rationale behind raising fuel prices in anticipation of crude oil hikes. “Then what happens if crude oil actually falls?” he wondered. “This is not serious stuff.”
To some, the government’s tenuous defence of its proposal seemed like an attempt to save face after the embarrassment of having the bill thrown out by deputies from pro-government parties refusing to fast-track a widely unpopular measure.
Chrysostomides was taken to task about this during yesterday’s briefing, but merely remarked that this was a “complex” issue and deputies had the right to their opinions and were not always bound to their party line.
He also refuted accusations that the publicising of the government’s proposal would lead to market speculation and the exploitation of consumers.
The government spokesman went on to say that “no one can safely predict price fluctuations… although right now we are experiencing an upward trend globally.
“At this time no one knows whether or when price rises will be applied, or to what extent,” he added.
According to market analysts, oil prices this decade have peaked above $30 in each of the past four years and $10 swings have become commonplace. And 2003 is on course to show the highest average crude oil price in the last 20 years.
Crude oil prices remain high as a result of security concerns in Iraq and Saudi Arabia, although forecasters predict a steady drop next year as OPEC gradually regains a grip on the market.
