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12° Nicosia,
23 July, 2024
 
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Government ends tax break, fuel and electricity prices to rise

Decision sparks cross-border fuel purchase talks, urgent action required

Maria Eracleous

Maria Eracleous

The Director General of the Ministry of Finance, Michalis Pantelis, has expressed the government's intention to end the measure of reducing excise tax on fuel and electricity. The current reduced rate, applicable until the end of June, suggests that consumers should anticipate an increase in fuel and electricity costs starting from July 1.

During an appearance on RIK's midday show, Pantelis stated that based on current data, there is no justification for extending the reduction beyond June. However, he noted that if there is a significant shift in the data before the end of the month, the decision could be adjusted accordingly. Pantelis explained that the decision would be made based on technocratic analysis, considering international fuel price developments. He added, "If we observe a major reversal in the price trend, then we will adapt our policy accordingly. I must mention that the National Price Commission (NPC) stated that any universally applicable measures should be removed, and therefore, the measure is not recommended to continue."

It should be noted that on April 12, the Cabinet approved the extension of the reduced tax on fuel until June 30.

Regarding concerns about increased inflation resulting from the reinstatement of the measure on fuel and electricity, Pantelis assured that they are closely monitoring price developments. The decision will ensure that prices do not exceed those of the same period last year, avoiding any creation of inflation.

Kyriakos Louka, a liquid fuel retailer, also commented on the matter, stating that prices, including VAT, will increase by 8.33 cents for motor fuel and 6.39 cents for heating fuel in July. He mentioned that based on current prices, this would bring motor fuel close to the range of 1.50 to 1.48, compared to the current price of 1.38.

Louka also raised the issue of fuel purchases from the occupied areas, highlighting the need for measures to be taken. Despite efforts to convince ministers, customs officials, and relevant authorities, no significant actions have been taken. Louka emphasized the industry's suffering and the importance of conducting controls, without advocating for the closure of checkpoints.

It should be noted that on April 12, the Cabinet approved the extension of the reduced tax on fuel until June 30. However, the reduction was initially limited to 50%, corresponding to a decrease of 4 cents on motor fuel instead of 8 cents. However, during discussions in the House of Commons Finance Committee, the reduction was ultimately restored to 100%.

[This article was translated from its Greek original]

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Cyprus  |  fuel  |  prices  |  government

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