Cyprus government approves €70 million inflation relief package

On September 30, 2026, the Cypriot Cabinet approved a new €70 million support package to mitigate the impact of inflation and rising living costs. This initiative, combined with existing programs, brings the total state assistance to approximately €160 million. Finance Minister Makis Keravnos emphasized that the measures, which include fiscal relief and direct subsidies, are funded through budget surpluses and efforts to reduce public debt.

The seven-point plan includes extending electricity subsidies for vulnerable households and commercial entities throughout 2027, covering 100% of price increases for 23,300 households. Additionally, the zero-VAT policy on essential goods, such as fresh produce, hygiene products, and infant food, is extended through 2027, with the list expanding on October 12. Heating oil excise duty will be reduced from 7.4 to 2.1 cents per liter from November 1, 2026, to April 30, 2027. Furthermore, 53,511 vulnerable citizens will receive a one-off payment of €200.

While the government views these steps as necessary support, consumer groups have expressed skepticism regarding the adequacy of the heating oil relief, noting the significant price increases recorded since March. Minister Keravnos confirmed he is currently in negotiations with the European Commission to seek a derogation that would allow for even deeper cuts to fuel taxes beyond current EU regulatory limits.