In a recent statement, the opposition party Akel has urged the Cypriot government to take decisive action to reduce electricity costs for both households and businesses. Akel’s leader, Stefanos Stefanou, emphasized the urgency of transitioning to natural gas for electricity generation, highlighting the prohibitive costs associated with the current use of heavy fuel oil. In 2022, Cyprus incurred approximately €350 million in greenhouse gas emissions allowances, underscoring the financial burden of delaying the switch to natural gas.
Stefanou’s comments followed a meeting with the leadership of the Natural Gas Public Company (Defa), where he reiterated the necessity of completing the liquefied natural gas (LNG) terminal at Vasiliko promptly. He also called for a thorough investigation into the agreement with the Chinese-led consortium contracted to construct the LNG terminal, demanding accountability and potential punishment for any improprieties associated with the “scandal.”
Akel has proposed several measures to alleviate the strain of high electricity prices on consumers, including a government-led initiative to halve VAT on electricity from 19% to 9%. This proposal was previously passed by parliament on Akel’s initiative but was later deemed unconstitutional. The party argues that the state has the fiscal capacity to reduce VAT on electricity, given increased tax revenues from fuel sales.
Additionally, Akel advocates for imposing a tax on the windfall profits of banks and energy companies, suggesting that the proceeds be distributed to the public in a targeted manner. This proposal comes in response to Cyprus’s ‘energy poverty’ index, which remains significantly higher than the EU average.
The opposition party also encourages the government to foster competitive tenders for renewable energy projects, a strategy that has led to lower electricity prices in other countries. Stefanou expressed concern over the lack of political will thus far but remains hopeful that these and other initiatives could be implemented soon.
Lastly, Akel has requested an extension of electricity subsidies, which are set to expire at the end of March. The party’s persistent demands reflect a commitment to addressing energy affordability and transitioning to more sustainable energy sources in Cyprus.
