The government is keeping the possibility of additional measures to address the energy crisis and rising cost of living open, but is holding off on immediate action, with options expected to be assessed at the Cabinet meeting on 30 September.
Finance Minister Makis Keravnos, speaking on Antenna’s midday programme on Tuesday, said the government is monitoring developments and considering further support measures, but declined to provide details.
“They will be announced when it is deemed appropriate and at the right time,” Keravnos said.
The approach contrasts with moves elsewhere in the European Union, where calls for more immediate action are growing.
European Commissioner for Sustainable Transport and Tourism Apostolos Tzitzikostas said there was “no time to waste” and called for concrete measures to address the current situation. He added that if conditions in transport deteriorate, he would request an emergency meeting of EU ministers to consider urgent action.
Government weighs its options
Asked whether further tax relief was under consideration, Keravnos said the reduced 5% VAT rate on electricity could not be lowered further because of European rules.
He also rejected claims of “double taxation”, saying the issue had been repeatedly discussed with the European Commission and that a different system could not be applied because VAT is imposed after other taxes.
Asked what options remained available to the government, Keravnos said numerous support measures were already in place.
He pointed to existing electricity subsidies for vulnerable groups, which he said cover 460,000 households and 106,000 businesses.
Because support is scaled according to consumption, he said some households have their costs fully covered.
Keravnos also referred to a broad range of everyday products subject to zero VAT, saying the measure continues to be renewed.
Asked about the impact of higher fuel prices on supermarket goods and other products, the minister acknowledged that energy costs spread throughout the economy.
Keravnos urges against alarm
Referring to fuel price increases and reports of some prices exceeding €2, Keravnos urged against alarmist assessments.
He argued that Cyprus remains in a better position than other EU countries because the crisis is both European and global rather than specific to the island.
Despite increases in transport fuel and energy prices, Keravnos said Cyprus remains the fifth-cheapest country in the EU, adding that vulnerable groups have been supported for the past three years.
He also urged the public to consider how conditions might have developed without the support measures already introduced.
Heating oil support not ruled out
Keravnos did not rule out further support or subsidies for heating oil, which has risen significantly to around €1.60 per litre.
He said the government would assess the situation once demand increases as temperatures fall.
“Fortunately, we do not need it yet. When we need it, the government will be there to respond,” he said.
Parties demand immediate intervention
Political parties, however, are calling for swifter action over rising fuel prices.
AKEL spokesman Charis Polycarpou said a number of EU countries were introducing emergency measures and lowering taxes to tackle the cost-of-living crisis, while accusing the Christodoulides government of responding with credit-rating upgrades and statements rather than practical measures.
Polycarpou said the state collected €200 million more in VAT and consumption tax revenue in 2026 because of higher prices, while the government continued to study the situation.
He pointed to diesel exceeding €2 per litre, heating oil reaching a record high and sharp increases in rents and electricity prices.
EDEK proposes automatic excise mechanism
EDEK also called for immediate and targeted intervention.
The party said market monitoring should be strengthened and greater transparency introduced into the way fuel prices are determined.
It argued that authorities should examine whether movements in import costs are reasonably reflected in retail prices and identify potential distortions or practices restricting competition.
EDEK also proposed establishing an automatic mechanism for adjusting excise duty as fuel prices change.
At the same time, it called for targeted assistance for those most affected, particularly residents of mountainous and remote communities and vulnerable population groups.
Expert warns diesel could reach €2.20
While the government has yet to take immediate action, energy experts warn that price pressures could persist until the end of the year and beyond.
Energy expert Charalambos Ellinas told CNA that high prices for petroleum products, particularly diesel and aviation fuel, could continue until the middle of next year.
He attributed much of the pressure to Russian refineries being taken out of operation following Ukrainian drone strikes, while exports of diesel and other petroleum products from the Persian Gulf have fallen by more than 50% because of the war.
For Cyprus, Ellinas estimated that diesel could rise above €2.10 to €2.20 per litre within the next one to two months and remain elevated for a considerable period.
Cyprus records sharp monthly fuel increases
Eurostat data published on Tuesday also highlighted the upward trajectory of Cyprus fuel prices, with the country recording one of the EU’s largest increases in petrol prices during August.
Diesel prices in Cyprus rose by 11.3% in August 2026 compared with July, while petrol increased by 6.2% over the same period.
On an annual basis, prices for fuels and lubricants in Cyprus increased by 19.1%.
With further increases forecast and political pressure mounting, attention now turns to the Cabinet meeting on 30 September, when the government is expected to assess whether additional support measures are required.
