The Plenary Session of the Hellenic Parliament unanimously passed the government bill introduced today as an emergency measure, to extend the reduction in the excise tax on motor fuels until November 30, 2026.
The previous reduction expires on September 17, with the new regulation taking effect on Friday, September 18. As stated by the Chair of the Finance Committee, DIKO MP Christiana Erotokritou, the measure involves a reduction of 8.33 cents per liter for both gasoline and diesel fuel.
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She added that the Ministry of Finance’s position is that it will continue to monitor developments in energy prices on the international market so that, if necessary, extend the reduction beyond November 30. Ms. Erotokritou also noted that the DIKO party welcomes the extension, pointing out that Cyprus applies the lowest excise tax rate on fuels, in accordance with the European directive, for the benefit of households.
Yiannis Laouris, a member of parliament for Direct Democracy, stated that the extension of the reduced rates until November 30 is “a step in the right direction,” which the party welcomes and will vote in favor of. He noted that pressure continues due to geopolitical instability, inflation, and rising interest rates, while noting that the party’s position is that the reduction should become permanent, since, as he said, prices in Cyprus remain at a very high level.
At the same time, Mr. Laouris proposed ending the imposition of VAT on the excise tax on fuel, describing it as “tax on tax.” He also proposed that the reduced VAT rate on electricity prices remain at 5% and that no VAT be imposed on the emissions levy.
Odysseas Michaelides, leader of Alma – Citizens for Cyprus, stated that the party would vote in favor of the reduction, which, he said, is necessary due to rising prices. As he noted, since June there has been an increase in fuel prices, as well as a 2.5-cent-per-liter increase for gasoline and a 5-cent increase for diesel in the taxes collected by the government.
Referring to heating oil, he said that before the war began, its price was approximately €950 per metric ton, whereas today it stands at €1,500 per metric ton, and he called on the Ministry of Finance to also review the taxes imposed on heating oil.
Speaker of the House and DISY President Annita Dimitriou referred to Cyprus’s integration, starting in January 2028, into the European system for transport emissions, emphasizing the need to take action.
ELAM MP Marios Pelekanos noted that the party had requested an extension of the measure until the end of the year, while expressing satisfaction with its extension until November 30. As he said, the measure will help alleviate the unbearable costs for households and businesses.
At the same time, he noted that other measures should be taken, such as exemptions from green taxes, taking into account, as he pointed out, that pollutants are emitted in the occupied areas—emissions the Republic of Cyprus cannot control—resulting in the associated costs being borne solely by citizens in the free areas.
AKEL MP Andreas Pasiourtides stated that extending the reduction in the excise tax on fuel is appropriate, but not sufficient, noting that AKEL has long been submitting proposals to ease the cost of fuel and other products.
As he said, with winter approaching, the reduction should also be extended to heating oil, while he raised again the issue of “double taxation” on fuel, with the imposition of VAT on the excise tax. As he said, the government should already have taken the necessary steps to abolish the imposition of VAT on the excise tax. Regarding the fiscal cost, he noted that the measure has led to increased government revenue, which offsets any costs. He added that AKEL will vote in favor of the extension, while also expecting the government to take measures as part of a comprehensive approach to the issue of high prices.
AKEL MP Giorgos Loukaidis stated that the discussion on fuel costs should take into account the fact that there is no public transportation in Cyprus, noting that, as a result, citizens are more dependent on private vehicles.
Referring to the causes of the price hikes, he blamed U.S. policy. He spoke of the reckless policy of a “far-right, unpredictable U.S. president” who launched an illegal war. He also noted that the government and the majority of political parties have not, as he put it, called for an end to the war, criticizing this stance as “submissive in the name of belonging to the West”.
DISY MP Savia Orfanidou stated that neither DISY nor any other party is, in her view, “complicit with Trump,” noting that the issue is more complex and that there are responsibilities on the other side as well.
Ms. Orfanidou said that DISY will vote in favor of the extension, as the extension of the measures was also its own proposal. Referring to inflation, she said it stood at 5.2% in August, noting that high inflation rates have serious consequences for households.
She viewed the emergency measures positively but stressed the need for a comprehensive, holistic plan to address rising prices, with a particular focus on those most in need. At the same time, she called for more investment in energy issues, electric vehicles, and energy storage, particularly in light of the inclusion of road transport in the emissions trading system starting in 2028.
In her rebuttal, Ms. Erotokritou rejected the argument regarding double taxation on fuels, explaining that, under a European directive that all member states are required to implement, the taxable base for VAT includes fees, duties, and taxes. As he said, if it is decided to exempt fuel from taxation, “let’s do it, but let’s be prepared for the consequences.”
He also called on members of Parliament to name which government had reduced taxes on motor fuels, adding: “None—only the current one.” She also emphasized that we must help society to the extent that the state’s resources allow.
Ms. Orfanidou noted that the emergency measures to address rising costs and the reduction in fuel taxes were initiated by the previous government, following Russia’s invasion of Ukraine in 2022.
Ms. Erotokritou replied that there had indeed been a reduction for several months following successive crises and under the Anastasiades administration, adding that DIKO “welcomes this and says it was the right thing to do,” while expressing her conviction that further reductions will be achieved if necessary by the current government.
Mr. Loukaidis noted that it is a fact that there have been crises in the past as well as social pressure to reduce taxes, pointing out, however, that the issue is not only “how much they paid,” but also “how many hundreds of millions the state collected in total from the tax hike,” which, he said, multiplied state revenues and created surpluses. He argued that only a minimal portion of this has been returned to society.
Mr. Pasiourtidis expressed his frustration with the notion, as he put it, that “the people should thank you,” questioning the purpose of the surpluses. As he noted, surpluses should not simply be accumulated but utilized when needed, as it is the state’s obligation to ensure that it provides support to its citizens in times of crisis.
Concluding the discussion, Ms. Erotokritou agreed that, when resources are available, society must be supported when it needs it, noting, however, that this is contingent on having those resources and managing them wisely to support society.
Source: CNA
