The electricity subsidy and zero per cent VAT on 11 essential goods will be scrapped as of October 1.

A finance ministry announcement said the scheme which expires on September 30 does not need to be extended as inflation rates are expected to stabilise at two per cent.

Energy costs and fuel prices have also gone down, and state intervention in the market should be avoided for extended period of times, it specified.

The measure has been in place from March 2023 until October 2024, and has come at a cost of €201 million, the finance ministry said.

With the zero per cent tax scrapped, consumers will pay five per cent on VAT for bread, milk, eggs, baby food, women’s hygiene products, baby and adult diapers, sugar, coffee, meat and vegetables.

Akel slammed the decision on Thursday, calling it out of touch with reality and an indication that “the government has no idea what a majority of society goes through due to the cost of living.”

“Just the other day, the consumers association identified an increase in prices for 18 key items, including most foods. And then the government pretty much said life isn’t expensive and measures are unnecessary.”

Disy said urgent measures should never become permanent and the government should instead focus on long-term solutions such as photovoltaics.

According to the consumers association’s August price index, 18 key items marked an increase in costs, with 10 of them rising by more than one per cent.

Vegetables and greens saw the sharpest spike, jumping by 41.7 per cent compared to July and now 14.2 per cent higher than in August 2023.

The association also identified a price drop in 25 category items compared to last year such as laundry detergent (1.9 per cent) and eggs (1.6 per cent).

 The most significant decrease was in frozen molluscs and shellfish, which fell by 11.2 per cent, though they are still 22 per cent more expensive than last August.