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Cyprus to absorb new energy bill hikes - finance minister

Cyprus to absorb new energy bill hikes - finance minister

Reuters · 07/28/2022 05:41
Cyprus to absorb energy bill hikes - finance minister

- Cyprus said on Thursday the state would absorb a sizeable chunk of cost increases in energy to buffer anticipated rises of up to 25% in bills in the autumn.

The state would cover up to all additional costs to so-called vulnerable households, and introduce a staggered subsidy for other consumers by between 85% and 50% based on consumption, Finance Minister Constantinos Petrides said.

A staggered subsidy was designed to encourage users to save on energy use, Petrides said. "We haven't hid the truth - prices will remain high so the long term solution is saving, and a comprehensive plan .. for fully easing our dependence on fossil fuels."

The measures would apply to almost half a million households and 111,500 businesses.

Russia's invasion of Ukraine and the ensuing disruption of energy supplies has left European countries scrambling to find alternative sources, and calls to cut down on consumption.

Despite having an abundance of sunshine and the discovery - still untapped - of gas in the past decade, Cyprus generates most of its electricity from heavy fuel oil.

Last week, U.S. energy giant Chevron CVX and Cyprus's Energy Ministry said they would expedite development of an offshore gas field discovered in 2011.

The European Union member state is part of any with continental Europe. Cyprus, along with island states Ireland and Malta, were recently exempted from a voluntary 15 % cut in gas use agreed for other member states.

(Reporting By Michele Kambas
Editing by Tomasz Janowski)