Background information

The Cyprus government put together a package of measures to address the energy crisis caused by the instability in the Strait of Hormuz and the resulting sharp rise in fuel prices aiming to support households and to maintain economic stability. The measures on the table involve the reduction of tax burdens on fuels and the subsidise of the energy cost and they have been approved by the Council of Ministers on March 26, 2026.

Content of measure

The package of the related measures include:

Reduction of the VAT rate on electricity to 5% for all residential consumers from May 1, 2026 to March 31, 2027 Reduction of the tax on motor fuels by 8.33 cents per liter for the period April – June 2026 Zero VAT on meat, poultry and fish, from April 1, 2026 to September 30, 2026 Postponement of the Green tax on fuel, preventing an increase of approximately 9 cents per liter A support scheme for airlines ensuring seamless connectivity of the country with key tourist markets A 15% subsidy for farmers purchasing fertilizers and agricultural supplies for April and May 2026 (see case CY-2026-14/4304 for details) *A 30% subsidy on the wages of hotel sector employees for business that remain in operation through April 2026 (see case CY-2026-14/4305 for details).

Use of measure

As announced by the President of the Republic, the total cost of the new measures, combined with those already in place, exceeds €200 million.

Target groups

Workers	Businesses	Citizens
Particular professions Other groups of workers	Sector specific set of companies	Applies to all citizens

Actors and funding

Actors	Funding
National government	European Funds National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Informed	Informed
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Peak or cross-sectoral level

Involvement

The package of measures was adopted in communication of the government with social partners – employers’ organisations and trade unions – and the pressure that they exerted to the government for support; however, no formal consultation process took place. The government was responsible for the designing of the package of the measures. Several Ministries and other governmental authorities, departments and services are responsible for the implementation and monitoring of the different measures of the package.

Views and reactions

Despite that trade unions welcomed the package of measures, they have described them as minimal, necessary and imperative taken that workers and the vulnerable groups are the immediate receivers of the impact of the war in the Middle East, particularly on fuel prices and electricity cost. They have also repeated the gap that exists for the special reduced tarif scheme for electricity of the Electricity Authority of Cyprus for the vulnerable groups and the fact that the majority of low pay pensioners, beneficiaries of the scheme, are not included in the scheme but need to go through application processes. On the other hand, the employers’ organisation said that the response of the government was swift and the measures of the package are targeted and focused on the sectors more affected by the crisis.

Sources

• 03 April 2026: Package of support measures (www.diakivernisi.gov.cy)