Cabinet approves €70 million cost-of-living package, including heating oil tax cut
The measures include a lower heating oil tax, extended electricity subsidies, expanded zero VAT on essential goods and reduced VAT on residential photovoltaic systems.
Nicosia, Cyprus. The cabinet approved a €70 million package of measures on Wednesday to address the rising cost of living. Finance Minister Makis Keravnos announced seven measures, including a cut in heating oil tax, extended electricity subsidies and VAT reductions.
Heating oil and electricity
Excise duty on heating oil will fall by 5.3 cents per litre, from 7.4 cents to 2.1 cents, the minimum level permitted by the European Commission. The reduction will apply from November 1 until April 30, 2027.
Two existing electricity subsidy schemes will be extended throughout 2027. They cover the special domestic tariff for vulnerable consumers, known as Code 08, which was due to expire on Wednesday, and the low-voltage commercial tariff, Code 10, which was due to expire at the end of 2026.
VAT measures and household assistance
Zero VAT on fresh fruit, vegetables, baby milk, baby nappies, adult incontinence products and feminine hygiene products will continue throughout 2027.
The existing zero-VAT measure for meat, fish and poultry, which was due to expire on Wednesday, will be renewed and expanded to include bread, milk, coffee, sugar and baby food. The expanded measure will apply from October 12 until May 31, 2027.
VAT on residential photovoltaic systems will fall from 19 per cent to 9 per cent. The package also includes additional financial assistance for vulnerable households and residents of mountainous areas.
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