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12° Nicosia,
23 May, 2024
 

Cyprus braces for soaring fuel prices

Consumers facing double-digit increases amidst economic uncertainty

Newsroom

Cyprus braces for a significant hike in motor fuel prices by mid-April, with increases of 10 cents per liter expected to impact consumer spending across the island nation, according to a report by Kathimerini's Maria Eraclous.

The impending surge in fuel prices stems from the termination of zero-rated measures on diesel and petrol effective April 1, coupled with mounting international oil prices. Analysts predict an 8.3 cents per liter increase in motor fuel costs, further exacerbated by the abolition of heating oil subsidies on April 15.

According to estimates from the Cyprus Consumers Association, raw material costs are projected to contribute an additional 2 cents per liter to fuel prices. Consequently, consumers can anticipate a collective increase of 10 cents per liter at the pump by mid-April, compared to current prices.

The looming rise in fuel prices is expected to prompt shifts in consumer behavior, with individuals likely to adopt more targeted and cautious purchasing habits to offset the anticipated increase in fuel expenses.

Furthermore, supermarkets in Cyprus are witnessing a notable trend toward private-label products as consumers seek alternatives amidst rising prices. These products, ranging from household essentials to food items, are gaining market share due to inflationary pressures on branded goods.

Data from the Joint Coordinating Committee (JCC) highlights a surge in plastic money spending across various retail sectors, signaling sustained consumer activity despite price hikes. Sectors such as electrical appliances and fast food are experiencing double-digit growth in turnover, reflecting continued consumer engagement amidst economic uncertainties.

The Office for National Statistics retail turnover index underscores a disparity between the increase in value and volume of transactions, indicating that rising spending may be primarily driven by price hikes rather than an uptick in transaction volumes.

In light of these developments, Cyprus is poised for a period of economic adjustment as consumers navigate the impact of rising fuel prices on their spending habits and overall household budgets.

TAGS
Cyprus  |  economy  |  consumer  |  high prices  |  inflation

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