The average price of diesel reached a historic high on Friday, reaching €1,997. The Cyprus Consumers Association and the Cyprus Association of Liquid Fuel Station Owners, speaking to CNA, asked the Government to consider the possibility of reducing VAT on fuel, but also to return to consumers the increased VAT revenue resulting from the increase in fuel prices.
According to the Consumer Protection Service's Retail Fuel Price Observatory, diesel is currently sold from €1,879 to €2,098. Its average price of €1,997 is higher than the previous historic high, which was recorded on 12/7/2022, when it reached €1,989, as reported to CNA by the President of the Cyprus Consumers' Association, Marios Drousiotis, noting that over 100 gas stations nationwide are already selling at a price of over €2.
The average price of heating oil has also reached a historic record in recent weeks, currently selling from €1,489 to €1,735, with the average price standing at €1,608, well above the previous historic high of July 2022, which was €1,515.
The average price of unleaded 95 is currently at €1,718, and ranges from €1,613 at the cheapest stations up to €1,798, still far from the historic high of €1,828 in July 2022.
Mr. Drousiotis estimated that by Saturday the "psychological threshold" of €2 in the average price of diesel will be exceeded. As he noted, the increases are daily, while when a company announces an increase, it is not implemented on the same day by all gas stations, resulting in the announced increase being implemented over a period of 2-3 days.
For his part, the President of the Cyprus Association of Liquid Fuel Station Owners, Savvas Prokopiou, estimated that the stations that have not yet increased their prices may proceed with the increase in question on Monday and not over the weekend.
Request for VAT reduction on fuel
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Referring to the measures that can be implemented in order to relieve consumers, both Mr. Drousiotis and Mr. Prokopiou urged the Government to proceed with a reduction in VAT on fuel.
Mr. Drousiotis said that the state, due to the increase, receives 7,5 cents per liter more VAT from gasoline, 11 cents per liter more from the increase in the price of diesel and 12,34 cents per liter more from the increase in the price of heating oil.
"The additional state revenues resulting from the increases should be returned to consumers," Mr. Drousiotis requested. He made special reference to the upcoming subsidy for heating oil, which, as he said, "is a one-way street," given the 65 cents per liter increase from March to today. He stressed, however, that any subsidy must be ensured to go to consumers and not be absorbed by gas stations.
He added that the Government could also reduce VAT on fuel to 5% from 19%, as it did on electricity, without the approval of the European Commission.
They can also, he said, appeal to the EU to approve them to further reduce fuel consumption tax, as Spain and Sweden have done. "There are alternatives," he stressed.
For his part, Mr. Prokopiou said that, since the phenomenon of fuel price increases is now pan-European, "perhaps the time has come to lower VAT on fuel throughout the EU," as states benefit from the revenue from increased prices.
He suggested that the process could start from Cyprus.
He also added that, if there cannot be a reduction in VAT, the return of state revenue from VAT to consumers should be considered. As he pointed out, in Cyprus "there are no realistic transportation alternatives" and this is also evident from the fact that fuel quantities are not decreasing in line with price increases, as is the case in other countries.
"We could ask for an exception as a country," he said, noting that in other EU member states 90% of the population can be served by public transportation, unlike Cyprus.
Meanwhile, when asked whether a general increase in prices has been observed due to increases in fuel prices, Mr. Drousiotis responded negatively, noting that the increases in fuel prices in September will be seen after 1,5-2 months in other products.
Source: KYPE
