The reduction in fuel consumption tax will be extended for another one or two months, Finance Minister Makis Keravnos said on Tuesday, as the government moves to maintain relief at the pump beyond the current expiry date of September 17.

Keravnos said the extension would keep the existing reduction unchanged, with the new measure expected to take effect on September 18 following approval by the cabinet and parliament.

“The measure will continue with the same reduction that is in effect today,” Keravnos said, adding that its duration was expected to be “one or two months”.

The minister said the measure would then be reassessed to determine whether another extension was required, as developments in energy markets and the wider geopolitical situation remained uncertain.

“The situation is changing daily,” he said, pointing to announcements and geopolitical developments in the Middle East that could quickly alter the outlook for fuel prices.

The finance ministry confirmed that the bill had been approved by Keravnos and would be forwarded to cabinet before being submitted to the House ahead of the September 17 expiry date.

The current reduction cuts excise duty by 8.33 cents per litre, including VAT, on motor fuels.

Petrol excise duty has been reduced from €0.429 to €0.359 per litre, while the rate for diesel has fallen from €0.40 to €0.33.

Keravnos said Cyprus had reduced the tax to the maximum level permitted under EU rules.

He also said Cyprus currently has the lowest petrol price in the EU apart from Bulgaria, attributing this in part to the government’s policy on fuel taxation.

“Developments in energy and fuel remain negative,” he acknowledged, whilst assuring that the government intended to continue providing relief to consumers.

The extension comes as international oil prices have risen sharply in recent days, with crude trading above $90 a barrel compared with around $80 a week earlier.

Petrol station owners’ association representative Christodoulos Christodoulou said on Monday that fuel prices had already recorded small increases over the previous two weeks.

He said it remained too early to assess the full impact of higher international prices because fuel companies had yet to receive shipments purchased at the higher rates.

The government has previously estimated that the existing fuel tax reduction has saved consumers €15.5 million.

Keravnos said the measure was being maintained in line with the European Commission’s approach to energy support, under which such interventions should be targeted and limited in duration.