Government Tackles Fuel Price Surge and Pension Reforms
In a recent statement, Finance Minister Makis Keravnos highlighted the government’s commitment to addressing the escalating retail fuel prices. Keravnos emphasized the adoption of “targeted measures” and the importance of “strengthening the incomes of the middle class” to combat these increases. The immediate focus, he pointed out, is to support the most vulnerable groups in society with specific interventions.
Keravnos acknowledged that the fuel price hike is not an isolated national issue but one that is influenced by broader European challenges, including the impacts of wars and geopolitical shifts. He reassured the public that the government is actively pursuing additional strategies to eventually mitigate these issues.
Last year’s blanket fuel tax subsidy, which provided a relief of eight cents per litre, was not renewed after its expiration at the end of the previous month. The upcoming “green tax,” set to be introduced later this year, is expected to further increase fuel costs by a similar amount. Despite this, Keravnos previously assured that green taxes would not significantly burden households and businesses, although he did stress the need for a shift in consumer behavior.
On the subject of pension reform, Keravnos expressed his determination to proceed with “persistence and rapid steps” in addressing the issue of multiple pensions for high-level government officials. The Cyprus Mail learned that plans are underway to replace these multiple pensions with a one-time lump sum payment. Currently, individuals who have served in high-ranking positions are entitled to lifetime guaranteed pensions from each role they have held after turning 60.
A finance ministry source revealed that this practice results in some individuals receiving up to six different pensions. While a new system is expected to save money over time, the exact formula for lump sum payments is still under development. The source also noted that any changes must respect the constitution, which guarantees separate pensions for certain government roles. Amending the constitution is not feasible without the consent of the Turkish Cypriot community, which has been disconnected from the Republic of Cyprus’s government since 1963.
