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Refining, transport, distribution and other costs contributed more to the annual increase in petrol prices in Cyprus than crude oil itself, according to calculations by the Cyprus Fiscal Council.
The Council's analysis shows that the average price of unleaded 95 petrol rose by 23.8 cents per litre between August 2025 and August 2026, from €1.351 to €1.589.
The figures refer specifically to that 12-month period. More recent data from the Retail Fuel Price Observatory put the average nationwide price of unleaded 95 at approximately €1.74 per litre on 2 October 2026.
What caused the 23.8-cent increase?
The Fiscal Council's inflation presentation for 2025–2026, prepared by its president, Dr Andreas Charalambous, breaks down the petrol price increase into four components: international crude oil prices, exchange rates, refining and distribution costs, and taxation.
The contributions to the annual change were:
ComponentChange per litreBrent crude oil+12.5 centsEuro-US dollar exchange rate+0.2 centsRefining, distribution and other costs+14.3 centsTax changes-3.2 centsTotal increase+23.8 cents
The largest contribution came from refining, distribution and other associated costs, which added 14.3 cents per litre, compared with 12.5 cents from crude oil.
Nevertheless, the Council emphasised that the underlying shock was primarily international, noting that Brent crude prices had risen by approximately 75% over three months.
The average price of crude oil reached $117 per barrel in April 2026, fell to $85 in June and stood at $91 in August.
What is included in the 14.3 cents?
The 14.3-cent component covers refining, transport, distribution and retail operations, as well as international refining margins.
The Fiscal Council explicitly stressed that this amount is "NOT the net profit of petrol stations".
Instead, it is calculated as the difference between the pre-tax retail price and the cost of crude oil.
This distinction is important when assessing the Cyprus petrol price increase, as the figure represents several costs and margins across the fuel supply chain rather than the earnings of individual petrol stations.
Excise duty fell, but VAT increased
The Fiscal Council also examined the impact of changes in fuel taxation.
It explained that a seven-cent-per-litre reduction in excise duty would lower the final retail price by 8.33 cents, including VAT, provided the reduction was passed on to consumers in full.
Between August 2025 and August 2026, excise duty was seven cents lower per litre.
However, because petrol prices had risen, the amount of VAT collected per litre increased by approximately 3.8 cents.
As a result, the overall tax burden on petrol fell by 3.2 cents per litre compared with the previous year, partially offsetting the increase caused by crude oil and other costs.
Why petrol remains cheaper than the EU average
The Council's presentation also compared fuel prices in Cyprus with those across the European Union.
During the week of 21 September 2026, petrol cost an average of €1.68 per litre in Cyprus, compared with €1.96 across the EU.
Cyprus had the fourth-lowest petrol price among the bloc's 27 member states.
Before taxes, however, the difference was minimal: €1.04 per litre in Cyprus compared with €1.05 across the EU.
"The difference in taxes explains almost the entire difference...
