Electricity prices could fall by 20 per cent

ELECTRICITY prices could drop by a further 20 per cent over the coming months, Finance Minister Charilaos Stavrakis optimistically predicted yesterday.

He was speaking after seeing the leaders of semi-governmental organisations, including the Electricity Authority of Cyprus (EAC), the Cyprus Telecommunications Authority (CyTA) and the Cyprus Ports Authority.

“If oil prices continue to sink, we should see an at least 20 per cent decrease in the price of electricity,” Stavrakis told reporters later.

This would be over and above the 10 per cent reduction in the cost of electricity to consumers over the last couple of months, he said.

The drop would happen in conjunction with a planned reduction in corporate tax paid by semi-government organisations (SGOs), from 25 per cent currently to 10 per cent.

The change will take effect as of January 1.

The reduction was a pledge included in President Christofias’ electoral manifesto; the government has already submitted the relevant draft bill to Parliament.

As a result of slashing corporate tax, the state stood to lose some €25 million annually, said Stavrakis.

“However, we feel that the contribution of SGOs to society merits this [reduction in income],” he said.

The move is part of the administration’s proposed restructuring of the organisations, which it wants to make more financially sound, competitive and “independent”. The latter notion is a bit hazy, because at the same time the communist government has vowed never to “sell out” SGOs – for instance by turning them into quasi privately-owned corporations.

Rather, as Stavrakis explained yesterday, the government wants SGOs to tweak their operation.

“They should exert efforts to get rid of non-essential operating costs, cut back on manpower or at least freeze new hiring,” said Stavrakis.

“This will be done in order to increase productivity. That is the goal,” he added.

For their part, the chairmen of the respective SGOs pledged to reduce their operating costs, which would then enable them to slash the price of services.

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