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Dissecting The Government's Position On High Electricity Prices

It is this reporter's opinion that the government's position on high electricity prices needs dissecting, since we are hearing the same old tired excuses and codswallop that we've always heard about the abusive monopolistic practices from the Electricity Authority.

The latest statement by government spokesman Stefanos Stefanou in blue - and the response in green.

"The large increase in fuel prices in the international market is responsible for the very large increase in the price of electricity"

If the EAC had turned to renewable energy 20 years ago when solar technology emerged, it wouldn't rely so much on fossil fuels. The 340 days of sun per year are not just for tourists.

"The government is working very hard on bringing natural gas for the production of electricity."

The government could have made the switch to natural gas 20 years ago, on the suggestion of the EAC. It's simple bad planning and lack of decisive measures.

"The price of oil today on the international market is $120 per barrel."

On the day he was speaking - 24.2.2012 - the price of oil was 109 USD per barrel. Just where is the government buying its fuel from and why does it talk about prices that are 11 USD higher than published market prices?

"It is sold in dollars and we buy in euros. The euro is reduced against the dollar."

Where does the spokesman get his figures? As of 24.2.2012, the day of his statement, the euro was up against the dollar, according to DailyFX: http://finance.yahoo.com/news/Dollar-Suffers-Biggest-Drop-fxcm-3844964429.html?x=0

"The destruction of the Vassiliko unit affects the price of electricity by 6.5%"

And whose fault is that?

The government's position on reducing VAT on electricity costs: "if such a measure is applied, it would be a dramatic decline in revenues (for the government)."

The people are tired of paying for the government's mistakes and bad planning. If the power market were truly liberalised and provided competitive prices from several suppliers, the government would be able to tax from multiple suppliers, not just one - the EAC.

This would mean higher revenues for the state. Note that there are people who choose to live without electricity because they simply cannot afford to pay the extortionate prices. The government cannot collect revenues on overdue or unpaid bills.

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