Cyprus is considering reinstating a reduced excise duty on fuels as European governments scramble to protect households and businesses from rising energy costs driven by the war in the Middle East, with Italy, Spain, Greece and others already moving to cut taxes at the pump.
Finance Minister Makis Keravnos said on Monday he was examining the possible reintroduction of reduced fuel excise duty — a measure Cyprus previously applied, with the most significant extensions expiring at the end of 2022 and during 2023. He ruled out imposing caps on wholesale or retail fuel prices, arguing they would not in practice help consumers.
Data compiled by Phileleftheros from the European Commission’s fuel price bulletin and the EC Taxation Department shows the scale of the tax burden on European drivers. As of 20 March 2026, taxes accounted for an average of 44.6% of the total cost of diesel across the EU, exceeding 50% in Italy, Malta, Slovenia and Ireland. All EU member states apply both excise duty and VAT on petrol and diesel, with VAT rates ranging from 17% in Luxembourg to 27% in Hungary. Cyprus’s VAT rate of 19% is among the lowest in Europe.
Despite that, Cyprus’s excise duty on petrol stands at €0.429 per litre — higher than Bulgaria (€0.363) and Malta (€0.359), though well below the EU average of €0.570. The pre-tax price of 95-octane petrol in Cyprus was €0.757 per litre as of the European Commission’s 16 March bulletin, compared with €0.746 in Bulgaria and €0.586 in Malta. The final pump price in Cyprus averages €1.424 — the third cheapest in the EU — against €1.331 in Bulgaria, the cheapest, and €1.334 in Malta. Greece, by comparison, has an excise duty of approximately €0.70 per litre and a VAT rate of 24%, giving it an average petrol price of €1.924 and placing it among the most expensive countries in the EU.
At least eight EU member states include a carbon, energy or other environmental tax within their total excise duty. The EU sets a minimum excise duty rate but allows member states to apply higher national rates to meet their own fiscal, environmental and economic objectives. Keravnos’s ruling out of price caps reflects a broader European consensus — though countries are taking markedly different approaches to the crisis.
Italy has gone furthest, cutting fuel taxes by 25 cents per litre for a temporary period of three weeks. Spain announced last Friday that it would cut VAT on motor fuels from 21% to 10% alongside reductions in excise duty. Greece announced a subsidised diesel scheme offering a benefit of around 20 cents per litre at the pump, together with a digital fuel card. Austria opted for a smaller tax cut of 5 cents per litre combined with profit margin restrictions along the fuel supply chain. Portugal introduced temporary tax cuts on both petrol and diesel, producing a reduction of a few cents per litre. Germany took a regulatory approach, restricting petrol station price increases to once per day at noon while leaving reductions unrestricted. France announced a €2 billion support package for households and professionals affected by higher fuel and electricity costs, but stopped short of fuel tax cuts or price caps. Slovenia, meanwhile, imposed temporary purchase limits — 50 litres per day for private vehicles and 200 litres for businesses and self-employed individuals including farmers — citing cross-border supply difficulties caused by the Iran war.
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