The Ministry of Energy has proposed abolishing the natural gas monopoly held by the state-owned Natural Gas Public Company (DEFA), according to a revelation made in the House of Representatives.
During a discussion on the introduction of natural gas for electricity generation, MP Averof Neofytou asked the Cyprus Energy Regulatory Authority (CERA) about a letter it received from the ministry four days prior.
The letter requested CERA to consider abolishing the emerging market in natural gas, effectively ending DEFA’s exclusive rights to import and distribute natural gas to consumers.
While CERA’s position on the proposal was not disclosed in Parliament, the move could potentially allow electricity producers to make their own arrangements for natural gas imports.
This could lead to more competitive pricing but also raise concerns about potential market dominance by larger players like the Electricity Authority of Cyprus (EAC).
The abolition of the monopoly would require Cyprus to relinquish its EU derogation for the state-owned natural gas company.
The fragmentation of natural gas orders could simplify the import process but may also increase costs due to smaller quantities and potential inefficiencies.
