ECONOMY

Cut diesel prices or else…

NICOSIA (Reuters) – Cypriot authorities warned petrol companies yesterday they would temporarily revoke a deregulation in prices unless pump rates came down immediately. «Prices must come down,» Commerce Minister George Lillikas told a news conference, saying he had asked fuel importers to reduce diesel prices. If companies failed to comply, Lillikas said he would invoke legislation allowing the ministry to control prices for 45 days. The government has faced an avalanche of criticism for deregulating fuel prices this week. It inevitably triggered an immediate spike as the price of crude hovered close to record highs on world markets. Authorities have defended their timing by saying that an end to price-fixing was required by European Union competition rules. Cyprus joined the EU on May 1. Officials had, however, warned at the outset that authorities would intervene if any distortions to either pricing or supply were detected. Deregulation prompted an immediate increase in pump prices. Prices went up by about 5.8 to 6 euro cents per liter, compared to the 3-4 cents per liter increase authorities had expected. The primary source of concern was the price of diesel, a fuel used in a variety of industries. The Commerce Ministry said prices must be reduced by two euro cents per liter.