Cyprus extends fuel tax relief amid global price hikes

Fuel prices in Cyprus are facing significant upward pressure as international Brent crude oil prices have surged past $94 per barrel, up from approximately $80 just one week earlier. Retail costs have already reflected these global market fluctuations, with diesel averaging €1.855 per litre and petrol around €1.602, showing an upward trend over the past 50 days. Christodoulos Christodoulou, Vice President of the Pancyprian Association of Petrol Station Owners, warned that without intervention, prices could approach €2 per litre.

To mitigate these costs, the Ministry of Finance has announced an extension to the reduced excise duty on fuel. The current measure, which provides an 8.33 cents per litre discount, was scheduled to expire on September 17 but will now be extended for ten weeks until November 30, 2026. This follows the government's broader April 2026 strategy to support households and businesses against rising inflation.

Looking further ahead, the government is preparing to harmonize national law with a European Union directive concerning biofuel blending in transport. This transition, set to begin in 2028, is projected to increase fuel prices by approximately 7 cents for diesel and 2.5 cents for petrol. In response, officials are developing €174 million in support measures for vulnerable groups, which are expected to be implemented starting in 2027 to ensure a smoother transition.