In an announcement released on Thursday, oil company, EKO, supported that if oil prices drop by 3 – 6 cents per litre the company will not be able to cover its operating costs. Responding to the criticisms of DISY MP, Averof Neophytou that the companies are profiteering, EKO said that the retail price of fuel is lower than those in January 2006. Specifically, the price of oil in the second half of January stood at 52.8 cent per litre and today amounts to 50.1 cents. “The price of crude oil in January 2006 stood at £29.97 per barrel and in November 2006 at £26.32”, the company added.

EKO clarified that it has used the average price of crude oil and the exchange rate of the dollar and the Cyprus pound. “It is not accurate, however, to compare the variations of the fuel retail prices with the fluctuations of the crude oil prices. In all EU member states, the purchase of the loads and their retail prices are based on the daily international prices of each product (oil, diesel etc), which depend on the price of crude and other factors, such as seasonability, demand, availability of loads etc”.

According to EKO, the Company’s gross margin to cover its operating expenses and profit are a few cents per litre.

High cost

As for the high prices in Cyprus, the company said that this is linked to the large quantities of fuel that it buys from Greece and Italy and the high cost of transport. “The Cyprus companies have an additional cost of adjustment-harmonization to European directives (such as Vapour Recovery, equipment etc).

EKO also insists that the oil stations in Cyprus compare favourably with the European. “With the electronic systems that they have, they serve their customers on a 24-hour basis”, it concluded.