Cyprus is pressing Brussels to allow a further cut in excise duty on heating oil, after deciding to lower it from 7 cents to 2.1 cents a litre, Finance Minister Makis Keravnos told the House Finance Committee on Monday as it began debating the 2027 state budget.
The government will also start proceedings with the European Commission to end what Keravnos called double taxation on fuel, saying VAT should not be charged on top of the additional tax. Discussions at EU level will focus on scrapping VAT, he said, adding that the matter falls under a European directive that the government wants to discuss.
“It doesn’t mean that whatever comes from the EU, we will apply,” he said, adding that this was not logical.
Interconnector
Asked whether the 25 million euros would be paid following the navtex, Keravnos said the government’s position on the Cyprus-Greece electricity interconnector is expressed by the President of the Republic and the relevant minister.
Under the fiscal responsibility law, the Finance Ministry is assessing the project and has asked for a viability study, he said. The project’s geopolitical importance is recognised, but it should go ahead without placing the cost on citizens, he added.
Keravnos said he had raised at last Friday’s ECOFIN meeting the need for additional funding for some countries for energy infrastructure that would help bring down costs.
LNG terminal
The natural gas terminal is listed among the budget’s fiscal risks. Keravnos said the risk lies in the Energy Ministry’s conditions for advancing the project not being met. These concern the state guarantee on loans already taken out, the failure to cash in the guarantees provided by the consortium that had taken on the project, and the outcome of international arbitration.
