By Stelios Orphanides
A year after the government lifted a ban on the use of liquid petroleum gas (LPG) by cars, drivers in Cyprus can still not buy this type of fuel anywhere, even after many car owners paid for the conversion of their cars, prompting stakeholders to suspect foul play.
“The situation is unchanged,” Aris Polycarpou, who chairs the association of autogas mechanics, said in a telephone interview on Tuesday, hours after participating in a meeting of the parliamentary committee of commerce which failed to attest any progress in the matter. “Government officials are repeating the same things,” Polycarpou said.
The only thing that may have changed, Polycarpou continued, is that “officials are now talking about the need of securing final approvals for petrol stations,” issued by municipal authorities.While this requirement would further raise the bar for potential LPG retailers who would have to install additional pumps at their stations at a cost of up to €70,000 after obtaining this type of licence, getting a supply of auto-LPG is impossible.
In an interview on Sigma TV on February 20, Polycarpou said that while he happened to be the owner of a petrol station in Paphos equipped with an LPG pump, fuel companies do not supply him as they lack the proper infrastructure to import, separately store, and distribute auto-LPG.
This after Cyprus secured a temporary exemption allowing it to tax this type of fuel with the same amount of excise tax as gas used mainly in kitchens.
Christina Karapitta, an official at the energy ministry, declined to comment when she was contacted on Monday to explain whether the state had a policy to introduce auto-LPG and what this policy was, if there was one.
“You have to talk to the permanent secretary,” she said. The permanent secretary, Stelios Himonas did not immediately respond to questions forwarded by the Cyprus Business Mail.
Philippos Kollitsis, managing director of EuropeGas Cyprus Ltd, a company which converts cars to use LPG, which also hired experts to train mechanics, said that an “invisible hand” blocked any initiative to help consumers reduce fuel cost and emissions with the use of the cheaper and environmentally friendlier LPG, either by suppressing demand or blocking supply.
The value-added-tax for this fuel was set to 19 per cent, compared to 5 per cent for heating LPG, he said as an example.
The procedures for the retail sale of auto-LPG were deliberately designed to discourage petrol stations from installing such pumps, he said. The requirement for subterranean LPG storage “on the grounds of increasing safety,” encountered only in Cyprus, increases the cost of pumps fourfold.
Still, despite the safety concerns, petrol stations and supermarkets can still store LPG bottles anywhere, even exposed to the sun, while hotels and restaurants do not have to store their LPG underground.
“They must have received wrong information from some people whose interests would be hurt by the introduction of LPG as fuel,” Kollitsis said.
According to fuel-prices-europe.info, a website, which compares fuel prices across Europe, the Mediterranean and North America, the retail price of auto-LPG in most EU countries is roughly half the price of petrol RON 95.
The “invisible hand” also made sure that the government eliminated, four years ago, a rebate on road tax for vehicles running on LPG imported in the past from abroad which further suffocated demand, Kollitsis said.
Kollitsis who invested a respectable amount in equipment to convert cars to use LPG and petrol, hired specialised staff which he later had to fire.
“Since 2012, we are paying rent, salaries, accountants, taxes, but unfortunately there is no selling point to refer a potential customer who comes to us to enquire about switching to LPG,” he said.