Fuel prices are expected to rise due to escalating uncertainty in the Middle East, with experts predicting a possible increase of €1.70 to €1.80 per litre. Prices have already seen an increase of 20 to 50 cents compared to last week, with a risk of exceeding the €2 threshold.
Petrol prices in Cyprus have risen on average 8.3 cents per litre after a government measure to subsidize fuel tax was lifted on April 1.
Increased traffic was observed at petrol stations on Saturday ahead of the termination of the measure to reduce the special consumption tax from Monday, 1st April.
The Cyprus government is ending an 8 cent subsidy on fuels after it expires on March 31, resulting in an initial increase of 7 to 8.3 cents a litre for motor petrol and diesel, along with a 6.3c hike on heating oil. The government also plans to introduce a green tax on fuel, which has been delayed until after the summer holidays. The impact of the green taxation on businesses and households is expected to be small, with compensatory measures provided to vulnerable population groups.
– The reduced fuel consumption tax, which was lowered by 8.3 cents per litre for petrol (95 octane) and diesel, and by 6.3 cents for heating oil, will end starting from 1st April.
– The consumption tax on fuel is set to be reintroduced at midnight on the last day of the current month.
– There has been a significant reduction in fuel prices in the last quarter, which stabilized two weeks ago, with very small increases observed in recent days.
– Cyprus has the cheapest fuel in Europe according to the European price observatory issued by the EU.
– VAT will be reinstated for 9 product categories on 30th April and for the remaining two categories related to meat and vegetables on 31st May.
– The public consultation on the draft law for green tax reform has been completed, with the taxation expected to be introduced within 2024, accompanied by compensatory measures decided by the Ministry of Finance.
– The termination of the reduced consumption tax on fuel is expected to lead to an increase in the retail price of fuel due to the imposition of green taxation, with an overall increase of about 10%.
– The cost for dealers will double with every one-cent increase in fuel prices, requiring them to spend approximately 2,000 euros for their stocks and monthly customers.
– The price of diesel is expected to exceed 1.50 euros per litre with the termination of the reduced VAT rate.
– The Pancyprian Association of Petroleum Dealers has requested that price adjustments be made on the first working day after their decision and not on a holiday, specifically on the 6th morning of the first working day.
Petrol prices in Cyprus are expected to increase by 14 cents per litre on April 1 due to the end of a government subsidy and the potential introduction of a green tax. The initial increase will be 7 to 8.3 cents a litre for motor petrol and diesel, and 6.3 cents for heating oil. The consumption tax on fuel is set to be reinstated at midnight on March 31. An additional increase of 5 cents may occur if the new green tax is approved. The green tax is expected to start from April 1, with an annual escalation from 5 cents in 2023 to 25 cents by 2033. Cyprus ranks among the EU countries with comparatively cheaper fuel. Petrol station owners warn of further increases due to pricier fuel shipments. The fuel tax exemption, introduced in March 2022, reduced the price of petrol by 7 cents a litre, diesel by 8.3 cents, and heating oil by 6.4 cents. In March 2022, the average price of 95 octane unleaded petrol was €1.44. As of the last reported Friday, the average prices were €1.412 for a litre of 95 octane petrol, €1.508 for diesel, and €1.067 for heating oil.
President Nikos Christodoulides warned of significant increases in motor fuel prices at the end of the month due to the end of reduced consumption tax and the introduction of a green tax. The end of the consumption tax reduction is expected to raise gasoline and diesel prices by 8.3 cents per litre, with an additional 5 cents possible from the green tax. The finance ministry aims for the green tax to start on April 1, as part of the Recovery and Resilience Plan. This could lead to at least a 14-15 cent increase per litre in fuel prices. The average price for 95 octane gasoline in Cyprus was €1.38 per litre, and diesel was €1.51 per litre. Prices are not expected to exceed the July 2022 record of €1.83 per litre soon. However, the green tax is set to increase yearly, reaching 25 cents by 2033, with VAT also applied. The Carbon Tax on Energy Products Act 2023 proposes this tax increase, affecting motor fuels, manufacturing fuels, and polluting industries.