Fuel tax extension offers temporary relief
Lower fuel prices and the extension of the reduced fuel excise duty are expected to provide temporary relief for households and businesses in Cyprus.
However, economists say the positive development masks the continuing financial pressures facing thousands of families, many of whom struggle to cope with even a single unexpected expense.
The debate follows a recent study examining the financial resilience of households, highlighting the difficulties many people continue to face despite economic growth and improving macroeconomic indicators.
Speaking on Sigma TV’s Mesimeri Kai Kati, economist Stelios Platis and Cyprus Consumers Association president Marios Drousiotis said rising living costs, housing affordability and widening inequality continue to shape the daily lives of many citizens.
Consumers welcome fuel tax decision
Drousiotis welcomed the government’s decision to extend the reduced fuel excise duty for another two months, saying both consumers and businesses would benefit from the measure.
He noted that the Consumers Association had initially expected the subsidy to end, making the extension a positive surprise.
“If we compare today’s fuel prices with those when the measure was first introduced, they are lower. But compared with prices before the crisis, they remain significantly higher,” he said.
‘The middle class is becoming the new poor’
Platis argued that Cyprus is increasingly becoming a society divided by different economic realities, with much of the middle class now under growing financial strain.
According to him, the problems are structural rather than temporary and are linked to the country’s economic development model.
“We have created a class of super-rich people and a middle class that is no longer truly middle class. They are the new poor,” he said.
“They are the people whose finances collapse if their washing machine breaks down or they face an unexpected medical expense.”
Platis was referring to findings from the Financial Wellbeing Index 2025 published by the Financial Wellbeing Institute and a recent Economy Today report.
Housing model blamed for widening inequality
Platis also criticised Cyprus’ heavy dependence on the property market and large-scale developments, arguing that housing has increasingly become an investment product rather than a social necessity.
He said productive sectors had taken a back seat to land and property development, contributing to greater inequality and higher living costs.
The economist also argued that longstanding corruption had influenced the country’s economic model.
“Corruption destroys competitiveness, undermines institutions and increases the cost of running the economy,” he said, adding that households ultimately bear the financial burden.
“Everyone wants to own land and sell it to foreign buyers for profit. What will be left for Cypriots in 10, 20 or 30 years?” he asked.
Doubts over batteries lowering electricity bills
Drousiotis also commented on plans to introduce electricity storage systems, saying the project should have moved forward years ago.
However, he questioned whether battery storage alone would reduce electricity bills for most consumers.
He said the main beneficiaries would be households with photovoltaic systems, as battery storage would significantly reduce energy curtailments.
In his view, however, the measure is unlikely to bring immediate reductions in electricity prices for households without solar panels.
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