Petrol station owners warn of more price increases at pump

The price of fuel at the pump is expected to increase further in the coming weeks, petrol station owners’ association chairman Savvas Prokopiou warned on Friday, with recent developments in the ongoing conflict in the Middle East having pushed the price of oil to its highest level since May this week. “We, as petrol station owners, are unfortunately monitoring the successive increases which generally affect both our industry and other industries. Based on experience, we expect a few more increases,” he told the Cyprus News Agency. He added that “we do not exactly know how many cents the price will increase by”, but said that “we have seen increases of one or two cents [per litre] in the past, so there may be a few more increases of this level”. Asked whether the government should make further interventions with the aim of keeping prices down, he answered in the affirmative, saying that “in our view, further intervention should be targeted for vulnerable groups”. The government had last week announced that the 8.33-cent reduction on fuel consumption tax until the end of November, and Prokopiou said on this front that “if there were a possibility from the finance ministry, there could be an additional general reduction in taxation”. “We are asking for a formula to be in place, whereby when prices rise above a certain level, taxes are automatically reduced,” he said. Petrolina insists prices in Cyprus are faring better than other countries Meanwhile, oil company Petrolina managing director Dinos Lefkaritis described fuel prices as “unpredictable”, and said that “no one can know what the next day may be like”. “They may go up, they may go down, something may happen anywhere in the world and affect the issue of petroleum products,” he said, before adding that at present, “there is an upward trend” of prices. On this front, he said that prices have “gone up a lot in other European countries”, and stressed that “in Cyprus, we are doing very well at the moment”. “The prices we have achieved and have at the moment are to the detriment of our company, but, I believe, also to the detriment of other companies. Our profit margins are very low. At least we, as a Cypriot company, try to be as low [in price] as possible,” he said. Asked about the relationship between the price of a barrel of oil and prices at the pump in Cyprus, he said that “in Cyprus, we have nothing to do with brent and crude oil”. “There is no refinery in Cyprus … At the moment, Cyprus is importing clean products. We closed our refinery in 2004. We were the only company which reacted to the closure of the refinery, but we were not listened to,” he said. As such, he added, “the price of petroleum products is the price applied by the refineries and not brent or crude oil”, and that “if the refinery in Haifa or in Greece puts an additional increase [on the price], that is what we will pay”. He said that the price of a litre of 95-octane petrol has increased by around 35 cents per litre since March 1, the day before Cyprus was hit by an Iranian-made drone as part of a rapid escalation of the conflict in the Middle East, with the average price sitting around €1.66 per litre. During the same period, he said, the price of a litre of diesel has increased by around 51 cents, and now sits at around €1.93. Prices at Turkish Cypriot petrol stations increased by 11 cents this week Rising fuel prices have also impacted Turkish Cypriot petrol stations, where prices have historically been markedly cheaper than others on the island and are set uniformly by a commission involving representatives of fuel companies and the Turkish Cypriot administration. An across-the-board increase of 6TL (11 cents) per litre on all consumer fuel products was announced by the authorities on Wednesday night, with 95-octane petrol now sold for 77.12TL (€1.38) per litre and diesel now sold for 76TL (€1.36) per litre at Turkish Cypriot petrol stations. The price of both products did not rise above 50TL until March 26, though according to the European Central Bank, the Turkish Lira has lost more than a quarter of its value in the intervening six months. On March 26, €1 was worth just over 41TL. Now, it is worth more than 56TL. ‘Energy minister’ Hasan Tacoy had on Thursday moved to defend the price increases, pointing out that Turkish Cypriot petrol prices remain lower than prices elsewhere on the island and in Turkey, but saying that with global oil prices rising, “it is inevitable that prices will also move upwards in our country”. He also pointed out that since March, the Turkish Cypriots have zeroed six fuel-related taxes in an effort to stem rising prices. Since then, fuel tankers docking in the north are not subject to any docking fees, while no customs duty is paid on the fuel they import, and fuel retailers’ contributions to the Turkish Cypriot agricultural insurance fund and tourism incentive fund have also been zeroed. In addition, municipal weighing fees – a tax paid by businesses to the municipality in which they are located based on the weight of goods sold – have been zeroed for fuel. Houthis now control almost all of Yemen’s western coast The latest rise in the global price of oil comes with Yemen’s Houthis having increased their regional standing, having taken control of almost the entire western coast of Yemen, including the eastern half of the Bab al-Mandab strait, a crucial chokepoint between the Gulf of Aden and the Red Sea. Around five per cent of global oil supplies passed through the Bab al-Mandab strait in February, typically passing northwards towards the Suez Canal and the Mediterranean beyond. In addition, Saudi Arabia’s east-west oil pipeline, which at its peak can transport 3.6 million barrels per day and allow the oil to avoid both the Strait of Hormuz and the Bab al-Mandab strait, was last week attacked by drones, which the Saudi Arabian government said had been launched by Iran-backed forces in Iraq. The volume of oil being transited through the Strait of Hormuz has fallen by almost two thirds since the beginning of March, with around 8.6 million barrels a day now crossing the strait, as Iran and the United States remain locked in a dispute over whether the strait is open. It is believed that the east-west pipeline may remain out of operation until November.