CYPRIOT buyers remain at the mercy of fuel importers, a consumer rights advocacy group said on Tuesday, after two consecutive hikes in gas pump prices over the last fortnight.
Fuel prices were jacked up twice within the space of two weeks, rising four cents from an average of €1.15 to €1.20 per litre currently on Unleaded 95.
Unleaded 98 now averages at €1.264, diesel at €1.214, heating fuel oil at €0.798 and kerosene at €0.807.
The increases come as crude oil futures rose steadily in December. The February contract for global crude benchmark Brent was up 0.03 per cent at $55.19 a barrel while its US counterpart, West Texas Intermediate, gained 0.41 per cent to $53.25.
However, the almost instantaneous transference to higher rates at the pump has again raised the issue of the ‘rockets and feathers effect’ – prices rising rapidly when import costs increase but dropping slowly during reductions.
Head of the Consumers Association Fryni Michael said the problem was two-fold: a continuing lack of transparency as to the precise dates when importers make fuel purchases or as to the state of their stocks.
She added, however, that importers buy refined products, not crude oil.
“Consumers are at a loss to explain why and when fuel prices go up, and can only guess,” Michael said in comments to the Cyprus News Agency.
The other major problem is the absence of healthy competition, as 90 per cent of gas stations on the island have exclusive contracts with a particular fuel company.
“There exists a vertical agreement, and as a result consumers do not have a choice,” said Michael.
A vertical agreement is a term used in competition law to denote agreements between firms at different levels of the supply chain.
Michael suggested that the commerce ministry’s retail price watch should weigh in whenever it felt that fuel price increases were unwarranted. Instead, the service currently restricts itself to monitoring prices.
Nevertheless, imposing price caps on fuel was not the answer, she added.
Michael also asked what has become of a major investigation launched by the Commission for the Protection of Competition (CPC).
The CPC probe, initiated exactly two years ago, was to look into the prices of unleaded 95 petrol, unleaded 98 petrol, diesel, heating oil, and gas.
It would examine the entire supply chain – importation, transportation and storage.
The trigger for the investigation were complaints by individuals and groups, as well as press reports here and abroad that retail prices in Cyprus were not in tow with sharply falling petrol prices globally.
The probe concerned not only fuel importers, but also wholesalers, retailers, petrol stations, the association of petrol station owners, other associations, as well as the role of the state.
“No one knows what has happened to the CPC’s investigation. We have heard nothing, we don’t know whether it has been completed, what its conclusions are, nothing,” Michael said.
Meantime, she added, consumers are being doubly charged, paying 19 per cent VAT on top of the 49 cents per litre consumption tax on fuel.
In a statement, socialists Edek called on the government to step in and protect consumers, particularly “non-privileged citizens.”
Main opposition Akel said it was clear the government is not interested in addressing the issue.
“There can be no other explanation for the delays in implementing plans to alleviate the problem, such as through the use of liquefied petroleum gas (LPG) in road transport.
“We are perhaps the only country in the world where use of LPG has been green-lighted but LPG is nowhere to be obtained,” the party noted.
Akel said it would table the matter for discussion in parliament as soon as possible.
According to the commerce ministry’s latest updated retail price watch, the cheapest Unleaded 95 on the island is €1.166 per litre, the cheapest Unleaded 98 €1.223, diesel €1.165, heating fuel oil €0.735 and kerosene €0.765.
The most expensive Unleaded 95 is €1.243, Unleaded 98 €1.359, diesel €1.241, heating fuel oil €0.879 and kerosene €0.889.
Island-wide, the cheapest gas station is the Eko outlet on Demosthenis Severis Avenue in Nicosia, selling Unleaded 95 for €1.166.
By contrast, the priciest outlet was Eko’s on Spyros Kyprianou Avenue in Limassol (Yermasoyia), selling Unleaded 95 for €1.243.
