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Consumers to save €22 on energy bills after subsidy extension

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Consumers to save €22 on energy bills after subsidy extension

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    Cyprus extended its state subsidy for electricity prices until October, aiming to shield consumers from rising costs. However, the benefit for average households is modest, raising concerns about affordability.

    The subsidy covers the increase in kilowatt-hour prices compared to June 2022. While prices initially dipped this year, they have risen since March, reaching 31.1 cents per kilowatt-hour in June.

    For typical households consuming 800 kilowatt-hours per bimonthly billing period, the subsidy translates to an average benefit of just €22.

    Vulnerable households receive a larger subsidy, currently estimated at €69 per two months.

    The extension is expected to cost €12 million. The Ministry of Finance did not propose reinstating reduced fuel consumption tax rates, despite renewed price hikes.

    While current average fuel prices are lower than 2022 peaks, they remain above levels when the tax cuts were first implemented in July 2022.

    Separate data presented to the Council of Ministers showed inflation climbing again. May 2024 prices rose 2.7% year-on-year, following increases of 1.2% and 2.4% in March and April, respectively.

    Rising food, accommodation, and energy costs are key drivers of inflation, which averaged 2% between January and May.

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