Filenews 6 November 2023
Two of the 17 measures taken by the Government to tackle the cost of living crisis have been in place for a few days now.
According to an announcement by the Ministry of Finance, as of last Friday, the reduction of the excise duty on motor fuels (petrol and diesel) to the minimum rates was implemented, based on the acquis communautaire. The consumption tax reduction is effective from November 3, 2023 until March 3, 2024.
Moreover, from 15 November 2023 until 31 March 2024, the reduction of excise duty on heating oil to the minimum rate will apply, based on the acquis communautaire.
As the Ministry of Finance clarifies, the reduction of excise duty on fuels to the minimum rates (petrol from €0.429/liter to €0.359/liter, diesel from €0.40/liter to €0.33/liter and heating oil from €0.07473/liter to €0.021/liter), results in a reduction in their final selling price, including VAT by 8.33 cents per liter on motor fuels and 6.39 cents per liter on heating oil.
It also indicates that excise duty reductions contribute positively to mitigating fuel purchase costs by 5.4% for gasoline, 4.9% for diesel and 5.2% for heating oil, compared to the average selling prices of fuel that were applicable before the application of excise duty reductions.
Regarding coloured oil for agricultural purposes, it is noted that no reduction in excise duty applies, as the existing rate of €0.021/liter, applicable from 1/9/2017, is the minimum provided by the acquis communautaire. Furthermore, and in return for the corresponding amount of excise duty paid on coloured oil for agricultural purposes, the Department of Agriculture implements two State Aid Schemes, through which the State pays aid as follows:
– Aid Concession Scheme to beneficiaries of "coloured" agricultural oil for diesel used in vehicles for agricultural purposes,
– Scheme for the Provision of Aid to Beekeepers for diesel fuel.
In relation to LPG, it is noted that for heating LPG the excise duty is zero while for autogas the minimum rate is applied.
Tiered electricity subsidy
In addition, the subsidy of the cost of electricity is implemented. Specifically, it concerns a staggered subsidy of electricity costs for the billed months of November 2023 – February 2024, for electricity bills metered until 29.2.2024, covering residential, vulnerable, commercial and industrial electricity consumers.
The measure of graduated subsidy for electricity costs covers about 410,000 homes and 103,000 businesses. The calculation of the tiered subsidy for the November 23 tariffs takes into account any increases that have occurred in the eligible tariffs during the period June 2022 – November 2023, where for vulnerable consumers the subsidy covers 100% of the increase in the charge price of electricity consumption.
As specified by the Ministry of Finance, in case the bimonthly electricity consumption amounts to 800kwh for eligible EAC tariffs, the average percentage discount on the EAC bill is estimated at 15.2% for residential customers, 28% for vulnerable consumers, 7.4% for commercial and 7.9% for industrial consumers.
Please note that consumers whose consumption exceeds the maximum fixed tiered subsidy will not lose the subsidy up to the fixed ceiling. In addition to similar reliefs and similar handling, customers of suppliers other than EAC will benefit, provided that the approved capacity of these customers' premises does not exceed 70kVA (100A 3-F) and for those cases where increased tariffs arise due to an increase in fuel costs for electricity generation, provided that the contracts between them provide for the pass-on of this additional cost.
In conclusion, the ministry notes that these measures, in combination with the other measures included in the package of measures approved, contribute positively to supporting incomes affected due to exogenous factors in international energy price increases.
