Fuel targets rehash gas price debate

Consumers are crying foul over rising gas prices at the pump, with some resorting to crossing the checkpoints to fill up in the north as the government draws criticism for failing to meet EU energy goals.

According to Kathimerini Cyprus, a failure of the Republic of Cyprus to meet a 10% target set by the European Union in renewable energy sources is drawing criticism, as the goals set in 2009 must be met before the year is out.

Cyprus is currently at 5%, according to information provided by the Energy Ministry, while an ongoing effort to reach 7.3% consists of a plan to blend certified clean fuel with conventional fuel supplies.

But the ministry’s efforts would bring prices up, according to experts, as biofuel production is expensive due to higher labour costs and strict environmental standards.

Cyprus is expected to pay fines to the European Union for not meeting the target, while experts say consumers are expected to pick up added costs at the pump in the area of 5 to 6 cents for petrol, more than double of the official government estimate of 2 to 2.5 cents with taxes included.

Consumers in the Greek Cypriot south are also expected to continue a trend of going north to pay lower Turkish Cypriot prices for petrol, while local media reports speculate that an increase in the numbers is also likely. The Republic has reportedly lost tax revenue to the tune of €31.9 million for Octane 95 gas sales in the north and €25.2 million for diesel.

Industry officials are crying foul over the situation, saying gas prices are getting expensive in the south because of green targets while prices remain low and more competitive in the north.

But local critics and consumer advocates have said fuel prices in the south were being influenced by powerful cartels and lack of competition, while industry officials maintain there are a lot of unpredictable and fluctuating costs embedded in the final price.

Cyprus is also expected to pay fines if no steps are taken towards making the economy less dependent on fossil fuels.