Lack of competition leads to high fuel prices says minister

Fuel prices on the island are controlled by the lack of healthy competition both in wholesale and retail markets, Energy Minister Yiorgos Lakkotrypis said on Tuesday after a House Commerce committee meeting.

The minister, who was called by the committee to discuss the price of fuel, said the market in Cyprus is not regulated and the only tool the minister has at his disposal to intervene is setting a price ceiling, which is a very serious decision to make.

On Monday a consumer group prompted parties to question why prices were so high when international prices had fallen dramatically and had even threatened to sue the state saying it deliberately allowed prices to remain high to collect more taxes.

Lakkotrypis suggested the increase of storage space for wholesale to attract new importers and to achieve independence of fuel stations from fuel companies.

“We have also suggested the improvement of transparency toward consumers,” Lakkotrypis said.

He added his ministry will meet the Auditor general within the week to discuss this.

“We also expect the companies and the fuel station owners to contribute so that transparency toward the consumer is improved,” Lakkotrypis said.

Committee chairman Lefteris Christophorou said the Cypriot consumer must be protected in cases where principles and rules of competition are violated.

“The market is free but it has to move in fair prices, so that a price ceiling is not necessary,” DIKO committee member Angelos Votsis said.

The head of the petrol station owners Stefanos Stefanou said it is not them that map policies but the companies that import 85 to 90 per cent of all fuel and added that the margin for profit at petrol stations is 4.5 to 5 cents per litre.

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