Cypriots Struggle with Cost of Living as Officials Cite Limited Solutions

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During a meeting at the House energy committee on Tuesday, officials confirmed there are currently no viable ways to reduce energy costs, which are heavily impacting the prices of essential goods. With inflation weighing heavily on lower-income households, one MP warned that some people are facing “financial annihilation” from the high cost of living.

Committee chair Kyriacos Hadjiyiannis from the Disy party pointed to a lack of “trust” in regulatory bodies responsible for monitoring prices and trade practices, specifically naming the energy regulatory authority, the Commission for the Protection of Competition, and the Consumer Protection Service within the commerce ministry. Hadjiyiannis stressed that these agencies need to deliver tangible results in order to gain public confidence. “Until we see proof of their work and inspections, neither the population nor I can put our trust in them,” he said.

Hadjiyiannis also expressed concern that the energy market in Cyprus operates under the control of a tightly-knit “clique” of interconnected players with shared interests, further inflating energy prices.

Giorgos Petrou, chairman of the Electricity Authority of Cyprus (EAC), joined the session and faced criticism over the EAC’s limited actions to control electricity costs. Petrou acknowledged that the EAC does not possess the technical capabilities to purchase fuel at optimal times when prices are low. Instead, they restock monthly, lacking storage facilities that would allow for bulk purchases.

Petrou also responded to recent remarks from Fiscal Council head Michalis Persianis, who suggested the EAC could cut prices by reducing its fixed costs, which include operational expenses like payroll. A representative from the energy regulatory authority clarified that payroll represents only about 9% of the EAC’s budget.

In addition, Petrou explained that the EAC follows an advance-purchase strategy for greenhouse gas emission allowances. He noted that the EAC recently bought 800,000 out of the three million required allowances for an average of €64 each, significantly lower than last year’s rate of €84. “We aim to keep costs at €64, and in case of a price hike, we’re prepared to use cash reserves,” he stated.

Marios Droushiotis, head of the Consumers Association, raised an issue about the lack of detailed data from the Statistical Service, which he said hinders accurate calculation of inflation rates. According to Droushiotis, the Statistical Service only provides “weighted prices” and has declined requests for “actual prices.”

Overall, officials concluded that the only feasible solution to reduce electricity costs lies in switching to natural gas for energy production, an undertaking that is still pending.

Source: Cyprus Mail

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