Cypriot motorists have been granted a reprieve at the pumps after the Finance Minister, Mr Makis Keravnos, announced yesterday that a temporary cut to fuel excise duty would be extended until the end of November, following a meeting of the Council of Ministers.
The measure, which reduces the special consumption tax by 8.33 cents per litre on both petrol and diesel, had been due to expire on 17 September. It will now remain in force until 30 November, in what the Minister described as part of continuing efforts to shield households and businesses from the fallout of geopolitical turmoil abroad.
Mr Keravnos was candid about the forces now driving prices at the pump, laying the blame squarely on international markets rather than domestic production costs.
“Owing precisely to these developments, prices at this moment are not determined by production costs, but by the stock exchanges and the markets, which are affected daily by the statements both of President Trump and of others involved in this geopolitical development that has created the global economic crisis,” he said.
ECB Raises Rates Again Amid Middle East Tensions
The announcement came on the same day the European Central Bank pressed ahead with a further quarter-point increase to its key interest rates, citing persistent inflationary pressure linked to the conflict in the Middle East.
Announcing the decision, the ECB President, Ms Christine Lagarde, said the Governing Council had voted to lift all three of the Bank’s key interest rates by 25 basis points, warning that the ongoing conflict continued to fuel price pressures.
“The conflict in the Middle East continues to generate inflationary pressures, and inflation is expected to remain considerably above target for a prolonged period,” Ms Lagarde said.
From 16 September, the deposit facility rate will stand at 2.55 per cent, the main refinancing rate at 2.65 per cent, and the marginal lending facility at 2.90 per cent.
The Central Bank cautioned that turmoil in the Middle East, coupled with continued volatility in energy markets, would keep upward pressure on prices, with inflation forecast to remain above the Bank’s 2 per cent target for some time to come.
