**Fuel Tax Cut Extended Until End of November**
The Cypriot government has announced an extension of the reduction in excise duty on petrol and diesel, which will now remain in effect until November 30, 2023. This decision was confirmed by Finance Minister Makis Keravnos on Thursday, following a cabinet meeting where the proposal was approved. The initial tax reduction was set to expire on September 17, but the ongoing volatility in energy markets prompted the extension.
The excise duty reduction amounts to 8.33 cents per litre for both petrol and diesel. Currently, this adjustment lowers the excise duty on petrol from €0.429 to €0.359 per litre and on diesel from €0.40 to €0.33 per litre, inclusive of VAT. Minister Keravnos emphasized that this move reflects the government's commitment to support households and businesses amid geopolitical tensions that continue to affect energy prices.
Keravnos noted that fuel prices are increasingly influenced by financial market dynamics rather than just production costs. He pointed out that recent fluctuations in prices are a result of various international factors. As of three days prior to the announcement, petrol prices were reported at €1.59 per litre, with Cyprus boasting some of the lowest petrol prices in the European Union, second only to Bulgaria.
The extension of the tax cut comes amid warnings from various stakeholders that fuel prices could rise further due to ongoing instability in international oil markets. Disy MP for Famagusta, Nikos Georgiou, has urged the government to consider additional measures to safeguard consumers from potential price hikes associated with new EU sustainability regulations. He indicated that proposed legislation could lead to an increase of approximately seven cents per litre for diesel and 2.5 cents for petrol. Georgiou has also suggested that the existing tax reduction should be maintained through the end of the year and that a proposed green tax on fuels should be suspended.
In a separate statement, the left-wing party Akel has called for the abolition of VAT on fuel excise duty, labeling the current arrangement as "double taxation." Similarly, the nationalist party Elam has advocated for continued relief for consumers, citing the adverse effects of regional instability on households and small businesses.
The representative for the petrol station owners' association, Christodoulos Christodoulou, noted that there had been a slight increase in pump prices over the past two weeks. He cautioned that it is still premature to assess the full impact of rising international prices, as local companies have yet to receive shipments purchased at these elevated rates.
The Cypriot government estimates that the existing fuel tax reduction has saved consumers approximately €15.5 million. Minister Keravnos confirmed that the measure will continue for the extended period, and its future will be evaluated based on developments in the energy markets.
As the situation evolves, both consumers and industry stakeholders will be closely monitoring fuel prices and government actions to mitigate the financial impact of fluctuating energy costs.