Oil companies[/B] on Tuesday dismissed accusations that they are profiteering in what they say is a case of profiteering,regarding the setting of fuel prices, with some claiming that due to competition in recent months they have been recording losses because they cannot directly pass on the increased prices of the fuel shipments they receive.
The parliamentary committee on trade examined at length on Tuesday afternoon the issue of the rise in fuel prices and its impact on the economy and the Cypriot citizen and how to monitor prices, with committee chairman Kyriakos Hatzigiannis noting that companies are being asked to prove that they are not profiteering.
"Much has been said, complaints have been made that in relation to oligopolistic fuel marketing, there are windows which allow for the creation of improper profit, in other words, obscenity. It will be up to the companies themselves today to document that they are not doing what they are accused of," he said."
Hatzigiannis acknowledged that "we have an oligopoly and since we have an oligopoly we don't have proper functioning of competition." He said that there are four players in the market and two traders in the wholesale market.
The Director of the Consumer Protection Service of the Ministry of Commerce, Constantinos Karagiorgis, reiterated that with the data the service has in its possession, there is no justification for a cap on the retail price of fuel.
He said that with the new system there is more accuracy in monitoring prices. He said the service monitors three products, diesel, 95 octane petrol and heating oil.
And DISY MP Nikos Sykas said that "a climate is forming which is called obscenity and you have to convince that there is no obscenity."
More strident was AKEL MP Kostas Kostas, who cited figures showing that international oil prices have fallen in the last three months.
"In three months the companies have not brought any new cargo?" he asked, adding: "Some people are robbing people and the Consumer Service must do its duty."
DIKO MP Chrysis Pantelides said he expects answers from the Audit Service regarding the price monitoring process and whether the Service considers that the tools the Ministry has are sufficient.
On behalf of the DIPA, Michalis Yiakoumi said that the citizen lives the issue of the price every day in his skin. "The political bosses should have been present and we want answers. We got some answers which are unclear," he said.
Finally, Stavros Papadouris of the Movement of Ecologists described the issue as multidimensional and noted that every time the word calculation formula is mentioned, companies are scared, he said.
On behalf of ELAM, Geadis Geadis said in a statement that an attempt was made by everyone that everything was going well on the fuel issue "but based on a wrong methodology that at the end of the day the people have to pay".
A spokesman for the Audit Office reiterated the need to decouple petrol stations from wholesalers.
"Competition is working, we are suffering losses due to high fuel prices"
In response, representatives of the companies said that competition is working in Cyprus and added that in recent months they have been suffering losses because due to competition they cannot directly pass on to prices the increases in the loads they receive. The fuel they receive, they said, is refined which is more expensive than crude oil and is based on Plats prices, which acts as an exchange.
Petrolina CEO Dinos Lefkaritis said oil companies are portrayed as the "bad demon" of the consumer. "We are not. We are a public company, I challenge you to look at our books."
He said his company in 2021 had a turnover of €306 million, while its profits were €7.5 million, which corresponds to 2.5% of its turnover.
"Today we have (a price of) 1.82, because we brought expensive cargo, I cannot lower the price because I will have losses and no one buys from our service stations," he said."
Mr. Lefkaritis said the companies are importing refined fuel (Platts), with his company importing from Israel, adding that transportation fares have also increased, increasing the cost to the companies.
"We understand we are taking fire, if you think we are wrong try harder to check us," he added.
George Gregoras, on behalf of Hellenic Petroleum, spoke of many inaccuracies being made and added that the companies are receiving a kind of "unfair polemics with unsubstantiated accusations that can border on slander."
He said his company is delayed in adjusting prices at the pumps, adding that our company brings a ship every ten days. "We have a delay in everything whether the price goes up or down."
"You cannot explain the retail price compared to crude oil, one price for crude and another price for refined products," he said."
Speaking on behalf of ExxonMobil (which operates the Esso stations), Antonis Muzouros said the way of pricing differs from company to company. "We don't have time to pass on price increases, these are loss-making months. Every year we look to see which is the cheapest refinery in the region to buy from," he said."
"The last few months have been loss-making for our company, come and check them and close this issue. This is misinformation that exists in the market," he concluded.
On behalf of Shell, Kostas Tsigaras said for his part that the margin of the companies has not changed, it remains the same without taking into account that the companies are dealing with increased costs, "which we have absorbed and we are doing our work with increased monetary costs. Competition works in Cyprus."
He also said that 315 service stations operate in Cyprus, of which 28.5% or 90 are company-owned.
Staroil CEO George Petrou said that no immediate adjustments are made to prices according to the fluctuation of international prices because a five-day average is calculated and not of each cargo.
He dismissed accusations that oil companies are thieves. He referred to his company's profitability, saying his company "we have never had such losses because we could not implement the increases immediately and that is why we have suffered losses."
However, a spokesman for the service stations disputed that only a quarter of the service stations are controlled by companies, saying many service stations are operated by service stations that are owned by oil companies. He noted that their margin on the wholesale price is 5 cents.
Moreover, Loukas Aristodimou, President of the Pancyprian Union of Consumers and Quality of Life, criticised the Consumer Protection Service for acting "as a mouthpiece for companies". He asked the Parliament to make legislative improvements, to make the Consumer Protection Service independent and to improve the legislation governing the Competition Protection Commission.
On behalf of the KEBE, Andreas Andreou Director of Industrial Development said that obscenity is a very heavy charge and must be documented. "I would expect more explanation from the Consumer Protection Agency," he said. He cited fluctuations in fuel prices at service stations, which he said meant that competition was working to some extent.
An OEB spokesman said the authority is doing its job well and that the mechanisms are in place to check how many companies are profiteering and to see if the state's mechanisms are working and noted that companies should not be blamed because fuel prices are high internationally.
However, the commission has asked for data from the companies for the past six months. "We cannot be complacent. We have asked for data and we will come back to rule out any possibility or even a gap in the mechanisms of supervision and control of the fuel market," he concluded.
Source: CNA
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