**Fuel Tax Relief Extended to September as Government Raises Support Package**
The government of Cyprus has announced an extension of reduced fuel excise duties until September 17, 2023, at an estimated cost of €15.5 million. This decision comes after a request from several parliamentary parties during a session held on Thursday, allowing the measure to remain effective until parliament reconvenes after the summer recess to reassess the prevailing market conditions.
The extension maintains the current reduction in fuel taxation, which amounts to 8.33 cents per litre, inclusive of VAT. This move is aimed at alleviating the financial burden on motorists amid ongoing volatility in global energy markets. Under the revised excise duty structure, the tax on petrol will remain at €0.359 per litre instead of increasing to €0.429, while diesel will continue to be taxed at €0.33 per litre rather than the planned €0.40.
The finance ministry has indicated that Cyprus continues to enjoy some of the lowest petrol and diesel prices within the European Union. However, it remains vigilant regarding developments in the Middle East and their potential impact on international oil markets. Recent trends have shown a slight easing in wholesale oil prices and retail fuel costs, attributed to signs of de-escalation in the ongoing US-Israeli conflict with Iran. Despite this, the ministry has cautioned that prices have not yet stabilized.
Initially, the cabinet approved a two-month extension of the reduced fuel excise duties from July 1 until August 31. Following unanimous support from parliament on Thursday, discussions among government ministers led to the decision to extend the relief by an additional 17 days. This adjustment is expected to raise the total cost of the measure from approximately €12 million to €15.5 million.
The announcement has been positively received by consumer advocacy groups. Marios Drousiotis, president of the consumers association, expressed his surprise and satisfaction with the government's decision. He noted that without this extension, motorists would have faced an immediate increase in fuel prices starting in July. Drousiotis highlighted that while pump prices have started to decrease following the recent ceasefire, they remain significantly higher than pre-escalation levels. Specifically, petrol prices are currently over 21 cents per litre higher than they were at the beginning of March, while diesel prices are approximately 25 cents higher, and heating oil has increased by more than 43 cents.
Looking ahead, Drousiotis anticipates further reductions in fuel prices if geopolitical conditions remain stable, with new fuel shipments expected to arrive in Cyprus in the coming days.
As the government continues to monitor the situation, the extension of the fuel tax relief aims to provide temporary relief to consumers while navigating the complexities of the global energy landscape. The decision underscores the government's commitment to supporting citizens during challenging economic times, as it balances fiscal considerations with the need to maintain affordable fuel prices.