Cyprus unveils €70 million relief package to combat rising cost of living

The Cypriot government has introduced a €70 million relief package to address the rising cost of living. Key measures include a 5.3 cent per litre reduction in heating oil tax effective November 1, extended electricity subsidies, zero VAT on various essential goods, and reduced VAT for residential photovoltaic systems. Additional financial aid is also designated for vulnerable households and residents in mountainous regions.

President Nikos Christodoulides stated that his administration has spent over €1 billion to ease cost-of-living pressures since 2023. However, economic observers and experts suggest these measures may not address the root causes of inflation. Alex Apostolides, an economist at the European University Cyprus, attributed the high inflation rates—which reached 5.2 per cent in August—to a failure in the green energy transition and a continued reliance on mazut for power generation, noting that the stalled LNG project in Vasiliko has also contributed to high energy costs.