News Column

Petrol prices still a rip off

August 9, 2014

Some months ago in response to the twin crises of the then ISIS wreaking increasing havoc across northern Syria and into Iraq, and international reaction to the Russian annexation of Crimea with the concommitant unrest in the rest of Ukraine, oil prices rose sharply on international markets in anticipation of threats to supply.

In Cyprus this was reflected in a sequence of rapid rises of prices at the forecourt pumps from around mid €1.30s to mid €1.40s per litre.

For example Premium 95 rose quickly to an average peak of about €1.45 where it has remained for many weeks. However, in recent weeks as threats to supply from the above crises have not materialised, so oil prices have fallen back on international markets with closing price one day during the week for benchmark Brent Crude at just above $104 per barrel.

This represents a decrease of almost 10 per cent per month which has not been reflected in any way on Cyprus forecourts. One can only assume that the relevant government departments and the consumer affairs commissioner have taken their eyes off this particular ball, while the local petrol companies and garage operators must be rubbing their hands in glee at this ongoing boost to their already healthy profit margins.

Previously in such situations the oil companies always plead that they buy in advance on the spot market and therefore we must allow a time lag for current stocks to be consumed before price changes are reflected at the pumps.

Strange how this always seems to be a problem only when international prices go down and as I have said already, current prices have now been held for many weeks despite the steady and ongoing decline in the international market price. One is also left to wonder whether EAC will be reflecting the recent steep reduction in their oil costs on consumers' bills.

T J Murray, Larnaca

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Source: Cyprus Mail

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