The government on Tuesday approved a two-month extension to the levying of a reduced rate of fuel consumption tax, which has been in force since April and was due to expire at the end of the month, government spokesman Konstantinos Letymbiotis said.

“Cabinet today approved a proposal for the continuation of the reduced rate of consumption tax on motor fuels for a period of two more months, namely from July 1 until August 31,” he said, adding that the extension of the reduced rate is expected to cost the government around €12 million.

He said that the decision has been made “taking into account the fact that, despite the downward trend in energy prices which is observed, they are still at higher levels than normal, due to geopolitical developments”.

The rate therefore remains at 8.33 cents per litre for petrol and six cents per litre on diesel.

Letymbiotis on Tuesday pointed out that the reduced fuel tax rate was one of eight announced by the government at the end of March.

Others included a zeroing of the rate of VAT on meat, poultry, and fish until the end of September, and the non-implementation of “green taxes” on fuel, which had been set to raise the retail price of fuel by nine cents per litre.

The extension will require an act of parliament to enter force, with only one plenary session expected to be held before the end of this month, with that session taking place on Thursday.

When the matter was last debated by MPs, some called on the government to reduce value added tax on fuel, but a European Commission spokesman confirmed to the Cyprus Mail that such a move would be illegal.

However, Marinos Sizopoulos, who was at the time an MP for Edek, said that petrol stations in the Republic of Cyprus are subject to “unfair competition” from the north, where European Union law does not apply, and where VAT on fuel has been zeroed since March 19.