Fuel prices in Cyprus. MPs want to keep the discount permanent.

Fuel prices in Cyprus currently include a temporary tax break of approximately 8.3 euro cents per liter for gasoline and diesel. MPs from the Direct Democracy party want the reduced excise tax rates to be permanently incorporated into the law. The bill has been submitted to parliament.

The proposal does not represent another 8.3 cent reduction from current prices. Its goal is to preserve the existing tax relief without requiring periodic extensions by the government. The current arrangement is valid until November 30, 2026.

Fuel prices in Cyprus – what are MPs proposing?

The bill, submitted by Dimitris Souglis and Yiannis Laouris, proposes setting excise tax at €359 per 1,000 liters of unleaded gasoline and €330 per 1,000 liters of diesel fuel.

The basic rates, before applying the temporary relief, are €429 and €400 per 1,000 liters, respectively. In both cases, the difference is €70 per 1,000 liters, or 7 euro cents excise tax per liter.

After taking into account the 19% VAT, the tax effect is 8.33 euro cents per literHence the amount given in the announcements of approximately 8.3 cents.

The proposed rates correspond to the EU minimum

The amounts of €359 for petrol and €330 for diesel correspond to the standard minimum taxation levels for these motor fuels set out in EU regulations.

This means that further tax reductions are not simply a matter of arbitrarily setting a lower rate. They would require consideration of exceptions provided for in European law or an appropriate procedure.

The parliamentary bill still needs to go through the parliamentary procedure. It is not a binding change to the law, and its adoption also depends on the legal assessment of the proposed solution.

The government is considering extending the relief until March

At the same time, Finance Minister Makis Keravnos announced that he would submit a proposal to the government to extend the current relief, potentially until March 2027.

This is a separate path from the parliamentary bill. The government's proposal calls for another temporary extension, while Direct Democracy wants a permanent change in rates.

Based on the Minister's statement from November 4th, the March deadline cannot yet be presented as approved. The current, confirmed date for the relief is the end of November.

Permanent relief will not freeze prices at gas stations

Maintaining a lower excise tax would reduce the tax portion of the bill, but it would not guarantee stable gasoline and diesel prices. The final price would still be influenced by factors such as fuel purchase costs, transportation costs, and margins.

For drivers, the most important thing is to make a distinction: MPs propose maintaining the current level of tax relief, not an additional discount at the pump. Only the outcome of the parliamentary proceedings will show whether the solution will no longer depend on subsequent timely extensions.