CPC: Fuel price caps can’t solve market irregularities

IRREGULARITIES in the market can’t be solved with price ceilings, patch-up measures and disposable solutions, the President of the Committee for the Protection of Competition (CPC) said yesterday.

Costakis Christoforou was commenting on a law that was passed on Thursday enabling the Commerce Minister to set a ceiling on the wholesale and retail price of fuel.

“The dysfunctions of a market aren’t resolved with ceilings,” said Christoforou. “The weaknesses are handled with corrective measures; measures of political, structural and corrective policy.”

He said by ordering a ceiling, the government is effectively freezing the problem without dealing with it and it arises at a later date.

“When a market is an oligopoly, this determines a specific business behaviour, which must be examined by those who have a duty to examine it,” said Christoforou. “The market is dysfunctional; it needs to open, new players need to enter the market, lift today’s restrictions to enter the market,” said Christoforou.

Until today, he added, nobody has requested the opinion of the CPC on the matter. “If the new law complies with European justice will be seen as things develop.”

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