Another shock for the economy

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The government’s decision to compel fuel importers to raise biofuel in the fuel mix, which is expected to shoot prices up 5-6 cents a litre, is under attack from nearly every corner.

Energy Minister George Lakkotrypis issued a decree to put a higher percentage of biofuel in the mix for the country to meet its EU 2020 goals for 10 percent use of renewable energy sources in transport.

Experts estimate that petrol prices will rise by 2.5 cents per litre, and diesel by 4 cents with excise duty, price increases are expected to gradually rise to 6 cents per litre by 2020.

The opposition, trade unions and business world blame the government for not taking action to raise transport RES.

They accuse the government of leaving things to last minute, forcing Nicosia to roll over the cost to consumers of fuel to minimize CO2 emissions.

“We are now at 5 percent, our estimates say 3 percent,” says the Energy Minister. “Even with this painful market measure, the average annual energy content of traditional biofuels will be 7.3 percent of the total.

Lakkotrypis told MPs Cyprus is the EU’s fifth cheapest place to fill.

According to the Energy Ministry, the key way to secure 10% RES in transport by the end of this year is by rising the rate of approved biofuels in the mix.

“Cyprus ranks 5th among EU countries with cheapest crude, according to EU data… Cyprus ranks 12th among EU countries with the cheapest diesel,” Lakkotrypis said.

When detailing Cyprus ‘ commitments, Lakkotrypis said the main goal was to increase RES ‘ share to 13% of total energy consumption by 2020, an aim already achieved in 2018. Today’s share is 14 percent.

About energy production, the Minister said by the end of 2020, the indicative RES target was set at 16%.

Latest data shows that Cyprus is currently 9.37%, but the share is expected to rise to 19-20%.

When it comes to transport and the 10% RES target by the end of 2020, Cyprus ‘ share is currently 5%, with the decree released by the ministry expected to raise RES to 7.3%.

“The government is now finding ways to achieve these targets economically, selling rights in areas where it is over-performing, and purchasing rights in areas where it faces some difficulties,” Lakkotrypis said.

It basically means that Cyprus turns to the European Emissions Market to cover the remaining 2,7%.