Geopolitical tensions sustain elevated fuel prices in Cyprus

Cyprus’ total sales of petroleum products fell by 5.1 per cent in May 2026 compared with the same month last year, even as monthly demand strengthened and the government moved to shield motorists from elevated fuel costs by extending reduced excise duties.

According to figures released on Friday by the Cyprus Statistical Service (Cystat), total petroleum sales reached 127,538 tonnes in May 2026, representing a decline from May 2025.

The annual decrease reflected weaker demand across most fuel categories, the service reported.

The sharpest declines were recorded in kerosene, down 23.6 per cent, followed by asphalt, down 20.8 per cent, heavy fuel oil, down 18.2 per cent, and marine gasoil provisions, down 13.3 per cent.

Moreover, heating gasoil was down by 11.5 per cent, followed by aviation kerosene provisions, down 7.5 per cent, road diesel, down 4.1 per cent, and motor gasoline, down 0.3 per cent.

The only category to register annual growth was light fuel oil, with sales increasing by 19.0 per cent.

Sales through filling stations also declined, falling 2.6 per cent year-on-year to 56,867 tonnes, suggesting slightly softer demand from private motorists despite continuing government support measures.

Compared with April 2026, however, the market showed signs of recovery.

Total petroleum sales increased by 7.7 per cent month-on-month, supported by stronger transport fuel demand.

Provisions of aviation kerosene rose by 13.2 per cent, while road diesel sales increased by 8.8 per cent and motor gasoline sales climbed by 8.3 per cent.

Marine gasoil provisions moved in the opposite direction, decreasing by 8.9 per cent from the previous month.

The statistical service also reported that petroleum stocks at the end of May increased by 7.1 per cent compared with the end of April.

Despite the weaker annual performance in May, the broader trend for the year remained positive.

During the January to May 2026 period, total petroleum product sales increased by 3.4 per cent compared with the corresponding period of 2025.

The figures come amidst substantial instability across global energy markets, alongside ongoing state efforts to mitigate the burden on consumers.

On Thursday, the House of Representatives unanimously approved a two-month extension of reduced fuel excise duties under an emergency procedure until August 31.

However, the government announced on Friday that it would extend the measure by a further 17 days, meaning the reduced rates will now remain in force until September 17, when parliament returns from its summer recess.

The extension preserves the current reduction in fuel taxation worth 8.33 cents per litre, including VAT, while keeping excise duty on petrol at €0.359 per litre instead of €0.429, and diesel at €0.33 per litre instead of €0.40.

The finance ministry estimates the longer extension will cost approximately €15.5 million, up from the original estimate of around €12 million.

What is more, the government said that wholesale oil prices and retail fuel prices had eased following signs of de-escalation in the conflict involving the United States, Israel and Iran, but stressed that prices had “not yet reached a point of stabilisation”.

It added that Cyprus continues to record some of the lowest petrol and diesel prices in the EU while closely monitoring developments in the Middle East.

The finance ministry further stated that the additional 17-day extension followed requests from most parliamentary parties during Thursday’s House session, allowing the measure to remain in force until parliament resumes after the summer recess and can reassess market conditions.

The measure was first introduced as part of a broader package of cost-of-living support announced in March.

Separate figures released by Eurostat earlier this month illustrated the continued pressure facing motorists despite recent declines in wholesale oil prices.

According to Eurostat, fuel prices in Cyprus increased by 20.5 per cent between May 2025 and May 2026, closely matching the European Union average increase of 20.7 per cent.

Every EU member state recorded year-on-year fuel price increases during the period, ranging from 3.5 per cent in Hungary to 33.9 per cent in Bulgaria.

Monthly price movements were more mixed. Diesel prices in Cyprus fell 1.5 per cent between April and May, while petrol prices increased 2.1 per cent over the same period.

Although overall inflation eased to 2.6 per cent in May, petroleum products remained one of the strongest contributors to price pressures.

International oil markets have remained highly sensitive to geopolitical developments in the Middle East.

International oil markets remain sensitive to developments in the Middle East.

As mentioned above, although wholesale oil prices have eased following signs of de-escalation and a ceasefire involving the United States, Israel and Iran, the finance ministry said markets have yet to stabilise fully.

Industry representatives nevertheless expect further relief for consumers.

“We are seeing a worrying stabilisation in international oil prices around $78 to $80 per barrel, which under normal circumstances should have moved lower almost a week after the US-Iran agreement,” said Petrol Station Owners’ Association chairman Savvas Prokopiou in a statement released last week.

Prokopiou added that he expects additional fuel price reductions in the coming days and reiterated his support for extending the reduced excise duties, arguing that doing so would prevent motorists from facing a sudden increase of more than eight cents per litre once the temporary measure eventually expires.

Meanwhile, the Cyprus Consumers Association also welcomed the decision on Friday, with president Marios Drousiotis describing the extension as “a pleasant surprise”.