Fuel prices in Cyprus are set to skyrocket in April due to the end of government subsidies, with petrol, diesel, and heating oil prices expected to rise by 8.3 cents, 8.3 cents, and 6.3 cents per litre respectively. The introduction of a proposed green tax could further increase fuel prices by at least 14-15 cents per litre, potentially increasing costs by around 10%.
Why are fuel prices expected to soar in April?
Fuel prices are poised to rise significantly in April due to the expiration of government subsidies, leading to an 8.3 cents per litre increase for petrol and diesel and a 6.3 cents increase for heating oil. Additionally, a proposed green tax could add at least 14-15 cents per litre, potentially rising fuel prices by about 10%.
Imminent End to Government Subsidies
The Consumer Protection Service has recently issued a reminder that a significant rise in fuel prices is on the horizon for April. This increase comes as government subsidies, which have been tempering prices, are scheduled to expire. Motorists are poised to see an immediate surge in costs, with petrol and diesel prices to jump by 8.3 cents per litre, while heating oil will go up by 6.3 cents per litre as of the first of April. The financial landscape could see even more change with the potential introduction of a new green tax.
Proposed Green Taxation
The specter of a green tax looms over consumers and businesses alike. The draft law, which is under public consultation, outlines a plan for a carbon tax on fuel that would initiate with an increment of 5 cents per litre this year and is projected to rise steadily to 25 cents by 2033. If the law passes as planned, it will mean an immediate increase in fuel costs by at least 14-15 cents per litre. Gas station owners have warned that this could climb even higher with the arrival of costlier fuel shipments.
The head of the petrol dealers association, Savvas Prokopiou, has expressed concern over the timing of these changes, as they coincide with the planned implementation of green taxation. The anticipated additional costs could amount to about a 10 percent rise in fuel prices. The psychological impact is also significant, as prices over €1.50 per litre often deter consumers.
Consumer Concerns and Market Impact
In a conversation with the Cyprus News Agency, Constantinos Karageorghis, the director of the consumer protection service at the commerce and energy ministry, indicated that while taxes are returning, the sting could be slightly lessened by the recent drop in global oil prices. Despite the forthcoming price increases, authorities anticipate that prices will remain below the record highs experienced in July 2022.
The end of the subsidy has previously led to cross-border fuel shopping, with motorists flocking to the north for cheaper prices. This behavior prompted the government to reconsider its approach to subsidies. As the cut-off date approaches, Prokopiou suggests a change in the law to prevent a rush at the pumps, proposing a shift in the time when new prices come into effect, from midnight to 6 am, aligning with station opening hours.
Looking Ahead
As Cypriots prepare for the changes in fuel prices, the dialogue around the green tax continues. The tax, aimed at reducing carbon emissions, is expected to be accompanied by compensatory measures, especially targeting vulnerable groups to offset the financial burden. The comprehensive strategy indicates a move towards a more sustainable and environmentally conscious approach to fuel consumption in Cyprus, setting the stage for a transformative period in the country’s energy sector.
Why are fuel prices expected to soar in April?
Fuel prices are poised to rise significantly in April due to the expiration of government subsidies, leading to an 8.3 cents per litre increase for petrol and diesel and a 6.3 cents increase for heating oil. Additionally, a proposed green tax could add at least 14-15 cents per litre, potentially rising fuel prices by about 10%.
What is the status of government subsidies on fuel in Cyprus?
The government subsidies on fuel in Cyprus are set to expire, resulting in a substantial increase in fuel prices. The subsidies have been helping to keep prices lower, but with their end, motorists can expect a jump of 8.3 cents per litre for petrol and diesel, as well as a 6.3 cents increase for heating oil.
How will the proposed green tax impact fuel prices?
The proposed green tax in Cyprus could further increase fuel prices by at least 14-15 cents per litre. The tax, which is part of an effort to reduce carbon emissions, is expected to start at 5 cents per litre and rise gradually to 25 cents by 2033. This additional cost could lead to an overall rise in fuel prices by around 10%.
What measures are being considered to alleviate the impact of rising fuel prices on consumers?
Authorities in Cyprus are considering compensatory measures, especially targeting vulnerable groups, to offset the financial burden of rising fuel prices. The government is looking at ways to support those most affected by the increase in costs, as part of a strategy to transition towards a more sustainable and environmentally conscious approach to fuel consumption in the country.
