President Nikos Christodoulides warns of an impending 8.3-cent rise per litre for gasoline and diesel in Cyprus due to the termination of a reduced consumption tax and introduction of a green tax as part of the Recovery and Resilience Plan commitment.
Motorists in Cyprus brace for the impact as fuel prices are expected to surge by the end of the month, with the green tax set to take effect on April 1, gradually increasing until 2033.
What is causing the impending fuel price surge in Cyprus?
The fuel price surge in Cyprus is expected due to the ending of a reduced consumption tax and the introduction of a green tax. Motorists should expect an 8.3-cent rise per litre for gasoline and diesel. The green tax is part of Cyprus’ commitment to the Recovery and Resilience Plan, with gradual increases until 2033.
Tax Changes Signal Price Increases
President Nikos Christodoulides has issued a stark warning concerning the expected rise in motor fuel costs. The impending surge is set to occur by the month’s end, coinciding with the termination of the reduced consumption tax on fuels. This event is further exacerbated by the coincidental implementation of a green tax. Motorists should anticipate an 8.3 cent per litre rise in the cost of fuels like gasoline and diesel.
The green tax, part of a broader carbon tax initiative, is due to take effect on April 1. The expedited legislation process is a result of Cyprus’ commitment to the Recovery and Resilience Plan. The finance ministry is racing against the clock, having only a short window to pass the necessary bill.
Potential Impact on Fuel Prices
Current average fuel prices in Cyprus hover around €1.38 per litre for 95 octane gasoline and €1.51 for diesel. While the predicted increases are significant, they are not expected to surpass the record high of €1.83 per litre experienced in July 2022. However, analysts suggest that fuel prices are likely to set new records in the coming years due to the incremental annual increase of the green tax.
The Carbon Tax on Energy Products Act 2023 outlines a structured increase in the carbon tax. Starting at 5 cents per litre this year, the tax is projected to rise to 10 cents by 2026 and reach 25 cents by 2033. This progressive increase also applies to manufacturing fuels and polluting industries, with the tax accumulating annually until 2033.
Government’s Stance and Public Reaction
Finance Minister Makis Keravnos has attempted to temper public concern by highlighting the minimal immediate impact of the carbon tax. He emphasizes the government’s plan to redistribute the additional tax revenue back to the community through various measures and schemes.
Despite these assurances, political figures like Akel leader Stefanos Stefanou have voiced their concerns. Stefanou advocates for the extension of current relief measures and cautions against hasty implementation of the green tax. He questions the necessity of Cyprus exceeding the EU’s demands, pointing to a lack of clarity regarding the compensatory offsets promised by the government. The responsibility of developing these offsets currently resides with the University of Cyprus.
Monitoring Ongoing Developments
As the end of the month approaches, Cyprus’ energy minister George Papanastasiou has hinted at the government’s flexibility regarding the specifics of the green tax. This statement followed a meeting with Stefanou, indicating ongoing assessments and final decisions still in the hands of the finance ministry.
The government’s approach to balancing environmental taxes with economic impacts remains a focal point of discussion. With measures yet to be finalized, the public is keeping a close watch on how these changes will affect their daily lives and the wider economy.
How will the green tax impact fuel prices in Cyprus?
The green tax in Cyprus is expected to lead to an increase of 8.3 cents per litre for gasoline and diesel. This tax is part of the country’s commitment to the Recovery and Resilience Plan, with gradual increases set to continue until 2033.
What are the current average fuel prices in Cyprus?
As of now, the average fuel prices in Cyprus are around €1.38 per litre for 95 octane gasoline and €1.51 for diesel. While the impending price surge is significant, it is not expected to surpass the record high of €1.83 per litre experienced in July 2022.
How will the green tax on energy products increase over time?
The Carbon Tax on Energy Products Act 2023 outlines a structured increase in the carbon tax. Starting at 5 cents per litre this year, the tax is projected to rise to 10 cents by 2026 and reach 25 cents by 2033. This incremental annual increase also applies to manufacturing fuels and polluting industries.
What is the government doing to address public concerns about the impending fuel price surge?
Finance Minister Makis Keravnos has assured the public that the government plans to redistribute the additional tax revenue back to the community through various measures and schemes. However, political figures like Akel leader Stefanos Stefanou have raised concerns about the necessity and implementation of the green tax, advocating for the extension of current relief measures.
