CONSUMERS face yet another increase in fuel prices after the government failed to take advantage of an EU grace period that would have frozen duty increases until 2012.
The EU suggested the transitional period, being adopted by the other nine acceding countries because they felt that sudden increases in fuel consumer tax would affect lower class families and businesses.
Reports yesterday said the Finance Ministry refused to accept the transitional period, choosing instead to rake in income from the increased fuel tax, a move which was met with fury by AKEL and opposition party DISY. Cypriots now face a further 3.5 cent increase on unleaded petrol and diesel
Finance Minister Markos Kyprianou admitted the ministry did not reveal that Cyprus could enter a transitional period, and that he did not inform the cabinet nor the Cyprus Co-ordinator for EU Harmonisation, Takis Hadjidemetriou.
Commerce and Industry Minister George Lillikas, who is supposed to be the person dealing with energy maters, said he was unaware of the policy the Finance Ministry had chosen to adopt.
AKEL yesterday attacked Kyprianou’s actions and warned that they would take measures to ensure the new fuel prices are not approved. AKEL spokesman Andros Kyprianou said the party would take the issue up with the president and will attempt to overrule the proposal.
DISY leader Nicos Anastassiades said any further price increases will have a negative impact on the consumer and warned that after the increase of fuel there would be further increases on other products and service and the state would introduce new taxes.
Anastassiades described the decision as a “suicidal” and accused the government of taking the easy way out, by imposing more taxes, and added that there should be other solutions to re-enforce state income.
“At a time in which other countries have succeeded in getting a grace period, our government wants to go ahead with increasing fuel prices by seven cents, and they call this social policy,” he said.
“When the middle and lower classes of the population are devastated, we will give them an ointment to ease the pain. This is not a policy this is hara-kiri,” Anastassiades added.
But Kyprianou defended the decision saying it was a political decision taken by the Finance Ministry. He insisted that with this policy, the consumer would not feel an increase in fuel.
As for the EU grace period, Kyprianou said each country followed its own economic policy.
“We cannot compare a group of acceding countries with each other, as some have a much higher VAT and others a higher Income Tax,” he said.
Kyprianou said with these factors, the government deemed it wiser to increase its income by raising the consumer tax and using the income to create balancing measures for those citizens that need it the most.
