Petrol prices will climb by eight cents from July 1 after the government has decided to scrap a freeze on consumer tax on fuel and a subsidy on electricity bills.
The Cabinet took the decision on Wednesday, and it was announced by Finance Minister Makis Keravnos shortly after.
He said prices at the pump would increase on Saturday when the relief measures introduced in March 2022 end.
Consumers will also see their electricity bills shoot up by almost €70, as the government only offers the relief measure to lower-income households.
According to Keravnos, lower-income households include the beneficiaries of the Minimum Guaranteed Income, people with disabilities or who cannot work, families with more than two children, single parents and unemployed.
This measure will be in place for three months at a cost of €2.5 mln.
Revealing the government’s intentions, Energy Minister George Papanastasiou recently argued, “It became clear that continuation of the reduced consumption tax on fuel is no longer justified”.
He said pump prices today had decreased to approximately the levels of March 2022, when the freeze was introduced.
The relief measures to buffer hiking inflation expire on July 1, with fuel prices going up by eight cents per litre and a €68.72 discount on electricity bills scrapped.
Based on today’s fuel prices, from July 1, the average price of 95 octane unleaded petrol and diesel will rise from €1.385 per litre to €1.407 a litre.
Also, the average price of heating oil will increase by around 6.2 cents per litre to €1.03 per litre, up from 0.97 cents.
Meanwhile, the Cyprus Consumers Association chief Marios Drousiotis said the government’s decision to scrap a subsidy on electricity bills was “unjustified” as electricity prices have hardly dropped.
He told CyBC radio the price of electricity per KW had only dropped by 6%, from 39 cents to 36.5 cents when the measure was first introduced.
On the contrary, Drousiotis considers the lifting of a freeze of the fuel consumption tax “justified”, as pump prices have decreased by 44 cents per litre, diesel by 58 cents and heating oil by 54 cents.
He noted, however, the state will recover €75 mln in revenue annually by restoring the fuel consumption tax.
“These revenues should go towards supporting specific groups of the population in need”.
The news comes weeks after a Eurobarometer revealed that most Cypriots are dissatisfied with measures to ease the cost-of-living crisis by the government.
A large proportion said they have difficulties paying their bills most of the time (91% in Cyprus, 68% in the EU) or sometimes (93% v 68%).
Meanwhile, Cyprus had the second-fewest respondents who were satisfied with their national government’s measures to tackle the cost of living (14% compared to 33% in the EU).
And the lowest percentage of respondents with a positive answer to the same question regarding EU measures (13% compared to 32%).