It will cover 50% to 85% of the expected new increase in electricity tariffs, with coverage reaching 100% for vulnerable groups.

Finance Minister Constantinos Petrides said the grant would also cover the reintroduction of VAT on electricity at 19%.

The government will pay this money to the EAC, which will adjust the tariffs on the July-August bills to be sent in September.

The new package comes in addition to the one already implemented at the cost of €300 million.

Petrides said the subsidy would cover both residential, commercial and industrial users of bi-monthly tariffs, thus supporting 449,000 households and 111,500 businesses.

“In this way, the measures are both horizontal and very targeted and will serve mainly the middle class, but also the vulnerable groups of the population,” Petrides said.

He said this measure also promotes savings.

“From the first moment, we did not hide the truth; electricity and energy prices will remain high.

“So, the permanent and long-term solution is focused on two factors, one is the savings factor and the second is the comprehensive planning of the Ministry of Energy and the government to complete decoupling from fossil fuels.”

He said that VAT on electricity is being brought back to 19%, but the government subsidy will absorb this.

“The state subsidy will cover two parts: the increasing percentage and the VAT.

“Instead of lowering the VAT, the state will subsidise this difference.”

Petrides said that bills sent in September would see a 20% to 30% reduction depending on the tariff.

He explained the subsidy would be paid to the EAC, and therefore the invoice received by the people will record the original price, the state subsidy, and the amount to be paid.

Energy Minister Natasa Pilides said energy saving and installing photovoltaic systems is the best method to permanently reduce the cost of electricity.

She pointed out that until 2020, €8 million per year was allocated to the subsidy plans, while the budget for 2021 will exceed €120 million.

At the same time, plans for installing photovoltaic panels, roof insulation and water heaters are running.

Source: Financial Mirror