Now is not the time to impose ‘green taxes’ and further burden people’s pockets, the finance minister said on Monday while reiterating that the government will roll out relief measures if and when necessary amid the energy crunch caused by the war in the Gulf.

Speaking to the Sigma television channel, Makis Keravnos said he does “not see the reasons” for implementing ‘green taxes’ at this moment.

Those who might have been worried about this extra tax burden “can rest easy,” he said.

The green taxation – part of Cyprus’ commitments under the Recovery and Resilience Facility – was supposed to have been introduced by last year. But the government entered talks with the European Commission and held off the measure.

The planned tax package included levies on fuel, waste and water.

The measures have faced calls to be scrapped or postponed due to inflationary pressures on consumers and businesses. The government has indicated that the ‘green taxes’ cannot be cancelled – only delayed.

It’s unclear what new deadline – if any – the government now has to introduce this taxation.

With fuel prices climbing amid the war in the Middle East, Keravnos was asked again what relief package the government has in mind.

Once again, he declined to go into specifics, saying only that the government has designed measures to tackle the anticipated rise in the cost of living.

“We will speak when the time is right,” he said. “We are fully ready, and when needed, we will implement the measures, providing relief to people and mitigating any adverse impacts on our economy.”

According to the minister, Cyprus has among the lowest prices for petrol, diesel and heating oil in Europe – “so there’s no need to panic.”

Answering another question, Keravnos ruled out the government imposing a cap on fuel prices or subsidising ferry or air travel.

“There’s no reason to discuss such things anyway, for now.”

The minister recalled that Cyprus has been implementing anti-inflationary measures since October 2023 when the conflict in Gaza broke out.

These measures come to approximately €100 million, he added.

They include cutting VAT on fuel, and scrapping VAT on essential consumer items.

The minister asserted that Cyprus has managed to keep inflation near zero.

Days ago, credit rating agency S&P left its rating of Cyprus and its estimation of the island’s economy unchanged in its latest assessment, stating the decision was taken despite the ongoing conflict in the Middle East.

Meantime, the government has accumulated cash reserves from budget surpluses – but won’t disclose the number.

Commenting on the war, Keravnos said the escalating energy crisis could nudge “some leaders into thinking that we don’t need any more conflicts”.

The minister said the EU should undertake an initiative to end the war in the Middle East, but also the one raging in Ukraine.