Nicosia pulls plug on fuel subsidies

Temporary state fuel subsidies are set to expire before the weekend in the Republic of Cyprus, after the finance minister announced an extension could not be justified.

Finance Minister Makis Keravnos emerged from a President’s Cabinet meeting on Wednesday saying fuel subsidies could not be extended beyond June 30.

A reduction of the sales tax on fuel prices at the pump had been implemented previously for a specific period. That period had already been extended and critics had been calling for another extension. 

But Keravnos suggested fiscal stability was a priority and responded to critics by saying, “I think we are in a better position to know the state of public finances.”

“And that is in a good state, and we will not in any way allow there to be any concern about fiscal stability,” he added.

The cabinet meanwhile decided to keep electricity subsidies by focusing on vulnerable households and farmers who use pumping stations to water crops.

Keravnos, a former banker who also served on the cabinet two decades ago, said the government had a fixed monetary policy that would focus on alleviating financial strain on the middle class and vulnerable groups.