Cyprus’s consumer price index rose 2.6% year-on-year in May, driven primarily by steep increases in fuel prices, according to figures released by the Statistical Service.
Diesel prices led the surge, rising 31.2% year-on-year in May 2026, reversing a 11.7% decline recorded in the same month of 2025. Petrol prices rose 17.8% over the same period, also reversing a 14.5% fall recorded in May 2025. The Statistical Service figures show that both fuel categories are swinging sharply upward after a year of relief for consumers.
Electricity provided the one bright spot, with prices falling 4.3% year-on-year in May 2026, continuing a downward trend after an 8.5% decline in May 2025 and a 40.8% surge in May 2022.
The Statistical Service data shows how volatile fuel and energy prices have been over the past four years. Diesel peaked at a 44.9% year-on-year increase in May 2022 before falling 20.7% in May 2023 and a further 11.7% in May 2025. Petrol followed a similar trajectory, rising 32.1% in May 2022 before declining in subsequent years.
The source attributes the current price pressure to geopolitical instability in the Middle East, which it identifies as the primary source of uncertainty and a key driver of Brent crude price movements. The trajectory of inflation will depend largely on how long the conflict continues, the source notes.
In response to rising fuel and electricity costs linked to the Middle East conflict, the government has announced a package of measures. These include a reduction of VAT on electricity to 5% for all domestic consumers from May 2026 to March 2027, a cut in excise duty on petrol and diesel of approximately 8.3 cents per litre for the period April to June 2026, and zero VAT on meat, poultry and fish from April to September 2026. Zero VAT on fruit and vegetables, introduced previously, is being maintained.
For context, Cyprus recorded deflation of minus 1.5% in May 2020. The CPI then rose 2.4% in May 2021 before surging to 9.1% in May 2022, the highest rate recorded since 2020. Current inflation at 2.6% is well below that peak, though the source notes that each additional price increase, however small, compounds the cumulative burden already carried by consumers since that period.
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