Fuel Costs Continue Upward Trajectory
Petrol station owners in Cyprus have issued warnings that fuel prices will continue to climb this week, following a period of significant increases that pushed diesel costs above €2 per litre. Christodoulos Christodoulou, chairman of the petrol station owners’ association, stated on Monday that forecasts indicate no near-term reduction in pump prices.
Christodoulou told the Cyprus News Agency that the price of a litre of diesel is expected to rise by an additional two or three cents before the week concludes. He noted that international oil prices have remained high, hovering around $108 or $109 per barrel. These global levels have not yet been fully passed onto the local market, according to Christodoulou.
Oil prices peaked at just over $106 on September 15 before dropping to $90 as of Monday evening. Despite this fluctuation, the chairman emphasized that the current trajectory points toward further increases rather than stabilization.
Current Pricing and Structural Factors
According to data reported by Christodoulou, the average price of a litre of diesel in Cyprus is currently around €2.03, with prices ranging from €1.94 to €2.12 depending on the station. Petrol prices have similarly risen, averaging €1.74 per litre, with a range between €1.66 and €1.82.
Christodoulou attributed part of these high costs to the structure of the regional supply chain. He explained that Cyprus lacks its own refineries, meaning local fuel costs are partly determined by refinery prices in Greece. This dependency means that changes in Greek market rates directly impact the baseline cost for Cypriot station owners.
While international oil prices have seen some volatility, Christodoulou noted that the specific price points currently affecting consumers are driven by a combination of global crude costs and regional refining margins. He stated that the forecasts do not support any imminent drop in fuel prices that would benefit drivers.
Consumer Advocates Challenge Subsidy Effectiveness
The warning from station owners has drawn criticism from consumer groups, who argue that government interventions are failing to lower costs for the public. Marios Drousiotis, chairman of the consumers’ association, stated that shoppers are entering "unknown" territory regarding potential price reductions.
Drousiotis pointed to a current government measure that provides an 8.33-cent-per-litre reduction on fuel consumption tax. However, he argued that this subsidy does not benefit consumers because petrol station owners retain the discretion to decide whether to lower retail prices accordingly.
Alleging that retailers have previously ignored similar incentives, Drousiotis cited a past instance in April when 19 petrol stations did not reduce their retail prices despite the introduction of a subsidy. He noted that the government had previously informed him that such behavior was "not illegal," leaving consumers with no recourse to ensure the tax break reached them.
The disconnect between government policy and retail pricing has become a central point of contention. Drousiotis highlighted that while the state collects up to 32 cents of VAT per litre at current high prices, this figure was only 19 cents when fuel prices stood at €1.20 per litre.
Government Seeks EU Support Amid Crisis
Amidst the local price hikes and consumer discontent, government officials are looking outward for relief. Energy Minister Michael Damianos called on the European Union for more support and funding to address the energy crisis during a meeting of energy ministers in Dublin.
The broader context of the crisis was highlighted by European Energy Commissioner Dan Jorgensen, who stated that months after the start of the conflict in Iran, the bloc is still facing an energy price increase. This regional instability underscores the challenges faced by Cyprus as it navigates both global oil market volatility and domestic economic pressures.