Fuel prices in Cyprus are significantly more expensive today compared to those on March 7, 2022. On that day, a measure to reduce consumption tax on petroleum products had been implemented to assist consumers.
According to Phileleftheros, prices have surged even higher when compared to those observed on June 30, 2023, the day the government decided to terminate the subsidy, citing the end of the price crisis.
The 16-month reduction in consumption tax on fuels lasted until the end of June 2023. During the implementation of the measure, the price of unleaded gasoline (95 octane) and diesel was 8.32 cents cheaper, while heating oil was 6.2 cents cheaper per litre.
Prior to the consumption tax reduction in March 2022, unleaded gasoline was 12 cents cheaper, diesel was 11 cents cheaper, and heating oil was 11 cents cheaper. Specifically, in March 2022, unleaded gasoline (95 octane) was sold at €1.43 per litre, diesel at €1.49 per litre, and heating oil at €1.22 per litre.
Yesterday, according to the fuel retail price observatory, the average price per litre was €1.55 for unleaded gasoline (95 octane), €1.60 for unleaded gasoline (98 octane) and diesel, and €1.11 for heating oil.
Prices increased after subsidy ended
The situation has become even more challenging for consumers since July 1, when the Ministerial Council, amidst public outcry, decided to terminate the subsidy. Since then, the price of unleaded gasoline (95 octane) has increased by 16.4 cents per litre, diesel by 19.4 cents per litre, and heating oil has become 14.5 cents more expensive per litre.
Specifically, on June 30, 2023, the final day of the measure’s application, unleaded gasoline (95 octane) was on average sold at €1.38 per litre, heating oil at €1.40 per litre, and diesel at 96.9 cents per litre.
The government justified the termination of the fuel consumption tax reduction by stating that fuel prices were lower than those on the day the measure was first implemented. The fiscal cost of the reduction in fuel consumption tax on transportation fuels, in accordance with the minimum rates defined by the European Union framework, from March 2022 to June 30, 2023, amounted to €97 million. The monthly cost averaged around €6 million.
Ministry of Finance monitoring prices
In an interview with Phileleftheros published last Sunday, Finance Minister Makis Keravnos stated that the government continues to systematically monitor developments in energy product prices, both domestically and internationally. He noted that the phenomenon of high prices is not unique to Cyprus but rather pan-European, if not global, owing to geopolitical factors and resulting uncertainty.
Furthermore, Minister Keraunos noted that the consumer support measures were temporary, and the decision to not renew them was based on data indicating lower prices compared to those of 2022. He asserted that the decision aligns with the transition from fossil fuels, as well as the encouragement of environmentally friendlier fuels through renewable energy-based electricity generation systems.
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