**Government Approves Extension of Reduced Fuel Consumption Tax Rate**
The Cyprus government has announced a two-month extension of the reduced fuel consumption tax rate, which has been in effect since April. This decision was confirmed by government spokesman Konstantinos Letymbiotis on Tuesday. The reduced tax rate, originally set to expire at the end of June, will now remain in place until August 31.
Letymbiotis stated that the Cabinet's approval of this extension is expected to cost the government approximately €12 million. He emphasized that the decision was made in light of ongoing geopolitical developments that have kept energy prices elevated, despite a recent downward trend. The current rates will remain at 8.33 cents per litre for petrol and six cents per litre for diesel.
This extension is part of a broader set of measures announced by the government at the end of March, which aimed to alleviate the financial burden on consumers amid rising prices. Other measures included the suspension of VAT on meat, poultry, and fish until the end of September, as well as the postponement of "green taxes" on fuel that were anticipated to increase retail fuel prices by nine cents per litre.
To implement this extension, an act of parliament is required. There is only one plenary session scheduled before the end of June, which will take place on Thursday. During previous discussions in parliament, some members urged the government to consider reducing the value-added tax (VAT) on fuel. However, a spokesperson from the European Commission clarified that such a reduction would be illegal under current regulations.
Marinos Sizopoulos, a former MP for Edek, highlighted concerns regarding competition faced by petrol stations in the Republic of Cyprus. He noted that these stations are at a disadvantage compared to those in the northern part of the island, where EU laws do not apply, and VAT on fuel has been eliminated since March 19.
As the government moves forward with this extension, the impact on consumers and the overall market will be closely monitored, particularly in light of the ongoing fluctuations in global energy prices.