Petrol prices drop as consumer tax slashed

Motorists got a respite from rising fuel prices as the government stepped in to lower the consumer tax on petrol by eight cents per litre.

The government’s decision came into effect Tuesday after receiving the necessary green light from the parliament last week.

The reduction in consumer tax on fuels is in force until 1 June, as a response to soaring inflation in recent months compounded by the war in Ukraine.

According to the Finance Ministry, the price cut corresponds to a reduction of 7 cents per litre for diesel and petrol, which amounts to 8.3 cents per litre if VAT is included, and a reduction of 6.4 cents per litre, including VAT, for heating oil.

On Tuesday, according to the Ministry of Commerce, the average selling price across the island for 95 Octane petrol was €1.374 per litre and €1.428 for diesel.

Finance Minister Constantinos Petrides said that authorities decided to slash the consumer tax on petrol to the lowest possible level permitted under EU law.

Petrides said that Cyprus now has the lowest petrol tax among its fellow EU member states following the decision.

The move comes after petrol station owners warned that motorists should brace themselves for a 10% increase in prices by the end of the month.

In comments to news site Stockwatch, the deputy director of the Commerce Ministry’s consumer protection service, Antonis Ioannou, said the consumer tax discount on fuel comes as a significant relief for households.

“If fuel price hikes do not come to an end soon, then in about 1-2 months, we will once again be buying fuel at the prices before the reduction was introduced”.

Ioannou pointed out that the retail price of 95 Octane petrol on 28 November 2021 was €1.36 per litre and on 9 February this year rose to €1.38 per litre.

On 25 February, the price rose again to €1.43.