Fuel Prices in Cyprus to Rise Amid Tax Changes

In a recent announcement, President Nikos Christodoulides has alerted the public to an impending surge in motor fuel prices expected by the end of March. This increase is attributed to the expiration of a reduced consumption tax on fuels and the simultaneous introduction of a green tax.

Motorists are bracing for an 8.3-cent rise per litre in gasoline and diesel prices as the tax reduction period concludes. Additionally, the new green tax, part of the government’s Recovery and Resilience Plan, could add another 5 cents per litre to fuel costs. The draft law for the carbon tax was presented for public consultation just a day prior and aims to be implemented by April 1st. However, the tight timeline leaves only about ten days for the necessary legislative approvals.

The average price for 95 octane gasoline currently stands at €1.38 per litre, with diesel at €1.51 per litre. While the anticipated price hikes are not expected to exceed the record high of €1.83 per litre set in July 2022, gas station owners have cautioned that further increases may occur due to more expensive incoming fuel shipments.

Looking ahead, a new record in gasoline and motor fuel prices seems inevitable in the coming years as the green tax is set to escalate annually. Under the Carbon Tax on Energy Products Act 2023, the tax will rise from 5 cents this year to 7 cents per litre in 2025, reaching 10 cents in 2026, and eventually hitting 25 cents by 2033, with VAT also being applied.

The carbon tax will not only affect motor fuels but will extend to manufacturing fuels and polluting industries. It is set to start at 7 cents per litre this year and will increase each year until 2033.

As Cyprus transitions towards greener policies, motorists and industries alike are advised to prepare for these financial changes. The government’s commitment to environmental sustainability is clear, but it comes with financial implications for consumers and businesses. For ongoing updates on this story, readers can follow the Cyprus Mail on Google News.

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