Consumers association calls for reinstatement of fuel subsidy

In a statement on Tuesday, the Cyprus Consumer Association proposed the reinstatement of a state subsidy on fuel, for an additional two months.

While the Association had previously endorsed the removal of the subsidy which stopped on July 1, it now highlights that the circumstances have significantly changed, justifying and necessitating the revival of fuel subsidies for another two months.

Among the reasons cited by the Association for the necessity of this reinstatement is the fact that fuel prices have surged by an average of 18 cents per litre since July, and projections suggest that these increases are likely to continue.

Furthermore, the Association notes that current prices have risen by 10 cents per litre compared to the rates that prevailed during the initial state decision to subsidize fuel on March 7, 2022.

It’s worth noting that the state’s finances won’t be adversely impacted by the reimplementation of fuel subsidies for an additional two months, the Association added. “Since the abolition of the subsidy on July 1st, 2023, until year-end, the government will gain supplementary revenue from Value Added Tax (VAT) levied on the increased fuel prices. These funds can then be directed toward fuel subsidies for an additional two months,” it said.

Citing repeated official statements from the Minister of Finance regarding the satisfactory state of the country’s finances and considering that the present economic situation of the state won’t be compromised by continuing fuel subsidies—given the consumers’ need for this support—the Cyprus Consumer Association said that “the reinstatement of fuel subsidies for at least another two months is imperative.”

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Reduced excise tax rate on motor fuel, electricity in Cyprus expires on June 30