Consumers should brace for new fuel price hikes come 2028, MPs heard on Tuesday, as Cyprus harmonises with EU rules increasing the use of biofuels in transport.

In parliament, officials said that upcoming legislation would be submitted to the EU within the next two months, after which the Commission would need another four months to examine it and come back with feedback.

The blending of biofuels into transport and aviation fuel, intended to reduce the intensity of greenhouse gas emissions, is calculated to raise the price of diesel by about 7 cents a litre, and 2.5 cents for petrol.

The revised Renewable Energy Directive establishes binding targets for the share of renewable energy in the transport sector, including maritime and aviation. By 2030, EU countries are required to either achieve a share of 29 per cent of renewable energy in transport, or to reduce the emissions intensity of transport fuels by 14.5 per cent.

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The relevant measures – and the price increases – will kick in as of 2028.

Energy ministry officials said EU member-states may begin introducing compensatory measures for ‘vulnerable groups’ a year ahead – in 2027.

They said the offsets are calculated at €174 million – €131 million from EU funds and the rest from the Cyprus state.

Because Cyprus does not produce sufficient biofuel, it was decided to go for the target of cutting the emissions intensity of transport fuels by 14.5 per cent.

On this point, a representative of the Scientific and Technical Chamber (Etek) remarked that, when it comes to biofuel production, “we’ve gone astray”.

Private businesses have received no support from either the state or the banks, he added.

House energy committee chair Nikos Georgiou (Disy) later complained about the government’s vague assurances regarding compensatory measures for consumers.

Officials told MPs that these offsets are included in the National Energy and Climate Plan, which is currently being revised.

“For us, this generic and abstract reference is not enough,” Georgiou said. “It’s a cliché that we’ve been hearing often in the past few years.”

The MP demanded that the government spell out the compensatory measures, along with a timetable.

Whereas the ‘green transition’ is necessary, he noted, it cannot constantly burden consumers.

Akel’s Andreas Pasiourtides said the coming changes would raise fuel prices even further.

And he reiterated his party’s longstanding proposal to abolish double taxation on fuel.

Today, said the MP, at least 50 per cent of the retail price of fuel consists of taxes.

After the fuel consumption tax is applied, the state levies VAT on top of that.

Doing away with the VAT on fuel would save motorists 7 to 8 cents a litre.

Biofuels are renewable fuels made from organic materials such as plants, agricultural waste, or algae.

According to information online, from 1980 to 2024 the average production of biofuels in Cyprus stood at 0.01 thousand barrels per day. By comparison, in 2024 the world average was 45.36 thousand barrels a day, based on data from 74 countries.