The energy crisis does not currently concern the supply of crude oil, but rather the reduced availability of refined products, primarily diesel, warns energy expert Charalambos Ellinas. Speaking on the Alpha News program, he estimated that price pressures will continue in the coming months, with Cyprus being particularly vulnerable due to its heavy reliance on diesel.
As he explained, despite concerns about strategic reserves, there is currently no shortage of crude oil. “Right now, there is enough crude oil. The problem is the supply of diesel and petroleum products—diesel, jet fuel, heating oil, all of those,” he said. According to him, the ongoing attacks on Russian refineries, as well as facilities in the Gulf region, have significantly reduced global diesel exports compared to pre-crisis levels, a fact that is fueling increases in international prices.
ΣΧΕΤΙΚΑ ΑΡΘΡΑ
Haris Papatheocharous: A photo with his wife from 2015
Pension reform: Aim is to bring it before the Cabinet soon
Mr. Ellinas estimated that the pressure is not likely to ease anytime soon, as even if the disruptions end, it will take time for the refineries to recover. “With the problems at the refineries continuing, not only will prices remain high, but they are expected to rise even further. For example, in Cyprus, there is a high probability that by November or December, prices will rise another 5%–10%,” he noted. He added that a return to more normal conditions is not expected before the middle of next year, while a full return of prices to previous levels will take even longer.
As for Cyprus, he does not currently see an immediate risk regarding supply, as a significant portion of petroleum product imports comes from Greece, and Greek refineries continue to operate and have access to crude oil. The biggest problem, he said, remains the cost. “What concerns us are the prices. Global prices, unfortunately, have risen, remain high, and we face this problem as well,” he said.
The repercussions, however, are not limited to the prices of transportation and heating fuels. Mr. Ellinas pointed out that diesel is a key fuel for transportation, food production, and electricity generation in Cyprus. “Don’t forget that 75% of the fuel used for electricity generation in Cyprus is diesel. If the price rises even further, the price of electricity will go up significantly,” he said, warning of a ripple effect on inflation and, by extension, on interest rates.
Regarding the G7’s decision to tap into strategic reserves, he assessed that it can offer only temporary relief and not a substantive solution, since the underlying problem remains the limited capacity of refineries. Regarding natural gas, he noted that European storage levels are about 10% below target levels, though he does not believe that Europe is currently facing a supply crisis, provided that weather conditions remain favorable and increased LNG imports continue. As for Cyprus, however, he estimated that fuel prices could rise by as much as 10%, while also highlighting the importance of continuing to reduce the excise tax to limit the burden on consumers.
