The government will extend reduced fuel excise duties until September 17 at an estimated cost of €15.5 million after agreeing to prolong the measure beyond its original August deadline.

As announced by the finance ministry on Friday, the decision follows a request from most parliamentary parties during Thursday’s House session, allowing the measure to remain in force until parliament resumes after the summer recess and reassesses market conditions.

The extension preserves the current reduction in fuel taxation worth 8.33 cents per litre, including VAT, helping to limit pump prices for motorists during a period of continued uncertainty in global energy markets.

Under the revised arrangement, excise duty on petrol will remain at €0.359 per litre instead of €0.429, while diesel will continue to be taxed at €0.33 per litre rather than €0.40.

The finance ministry said Cyprus continues to record some of the lowest petrol and diesel prices in the EU but added that it is closely monitoring developments in the Middle East and their effect on international oil markets.

Although wholesale oil prices and retail fuel prices have eased in recent days following signs of de-escalation in the US-Israeli war with Iran, the ministry said prices have “not yet reached a point of stabilisation”.

Cabinet had originally approved a two-month extension from July 1 until August 31.

Parliament unanimously endorsed the proposal on Thursday but ministers subsequently agreed to extend the measure by a further 17 days following discussions with political parties.

The ministry estimates the longer extension will increase the total cost of the measure from around €12 million to €15.5 million.

The decision was welcomed by the consumers association, which said it had not expected the government to continue the relief.

Association president Marios Drousiotis described the announcement as “a pleasant surprise”, saying motorists would otherwise have faced an immediate increase in fuel prices from the beginning of July.

Drousiotis said pump prices have begun to fall since the recent ceasefire but remain well above levels recorded before the escalation.

According to the association, petrol is still more than 21 cents per litre higher than at the beginning of March, while diesel remains around 25 cents higher and heating oil more than 43 cents higher.

He said further reductions are expected if geopolitical conditions remain stable, with new fuel shipments expected to reach Cyprus over the coming days.