The government’s measure to reduce excise duty on fuels will take effect on April 4, rather than April 2 as initially announced. The proposal, presented on Thursday to the House Finance Committee under urgent procedures, is expected to be approved by the plenary the same day and come into force at midnight on Saturday. The measure provides for a reduction of 8.33 cents per litre for petrol and 6 cents per litre for diesel. According to Nayia Symeonidou, head of the Tax Policy Unit at the Ministry of Finance, the aim is to address rising fuel prices linked to the war in the Middle East.
Temporary measure with fiscal cost
Symeonidou said the government is following Eurogroup guidance that such measures should be temporary and targeted. The reduction will therefore remain in place until the end of June and will be reassessed depending on developments. The total cost of the measure is estimated at €18.6 million. The implementation date was moved to April 4 to allow time for companies to adjust prices, provided the law is approved and published in the Official Gazette on Friday.
Separately, the reduction of VAT on electricity to 5% for all household consumers has already been approved by decree, with effect from May 1, 2026 until March 31, 2027.
Concerns over price pass-through
During the discussion, Christiana Erotokritou, chair of the Finance Committee, asked how the government would ensure that the tax reduction is fully and immediately passed on to consumers without profiteering at fuel stations. Symeonidou said implementation will be monitored by the Consumer Protection Service, adding that the Ministry of Commerce is responsible for investigating any complaints or violations and will provide updates to Parliament if needed. Erotokritou said Democratic Party will call on the Ministry of Commerce to increase inspections, stressing that profiteering under such measures is particularly serious.
Christos Christofides said profiteering is also reflected in how fuel price increases are passed on rapidly, while reductions are delayed under the pretext of existing stock. Savvia Orphanidou questioned whether other measures, such as the zero VAT rate on certain products, have been properly evaluated and called for more targeted policies. Symeonidou said there are indications the reductions are being passed on to consumers and that prices are being monitored. She added that the temporary nature of the measure allows for ongoing evaluation of its effectiveness.
Source: CNA