Cyprus electricity bills: 80% beyond state control, report reveals
"Nicosia experienced a rare decrease in household electricity prices in August driven by falling international oil prices, yet raw energy and carbon costs still comprise roughly 80 percent of the average Cypriot bill—the highest share among 33 European capitals tracked by HEPI—leaving consumers deeply vulnerable to external market shocks and limiting the government's ability to offer further relief through tax cuts."
EU Directive 2019/790 Article 15 Attribution • Verified Energy Document
Nicosia was one of only three European capitals to experience a decrease in household electricity prices in August. However, new data reveals that approximately 80 percent of the average Cypriot household's electricity bill is determined by raw energy costs, including carbon emissions allowances. This figure represents the highest share among 33 European capitals tracked by the Household Energy Price Index (HEPI), rendering consumers particularly susceptible to fluctuations in international fuel and carbon prices.
According to HEPI, network and distribution charges account for about 13 percent of the total bill, while energy taxes and related charges contribute a mere 2 percent, and VAT around 5 percent. This starkly contrasts with the EU capitals' average, where energy costs comprise 53 percent of the bill. Other European cities, such as Valletta (73 percent), Athens (70 percent), and London and Rome (both 65 percent), demonstrate a significantly lower reliance on energy costs, with Budapest reporting as little as 14 percent.
The recent 2 percent reduction in Nicosia's electricity bills in August, compared to July, was directly linked to a decline in international oil prices. This underscores how heavily Cyprus's electricity pricing is influenced by external geopolitical factors rather than domestic policy adjustments.
The limited portion of the bill allocated to taxes and regulated charges also restricts the government's capacity to offer substantial relief through further tax cuts. Energy taxes and VAT combined constitute only about 7 percent of Nicosia's final electricity price, falling well below the EU average of approximately 20 percent. Over the past three years, the state has already reduced VAT on electricity from 19 percent to the current 5 percent, a rate that remains in effect until March 31, 2027. Consequently, significant additional reductions via tax policy alone are constrained.
When adjusted for purchasing power parity (PPS), Nicosia's final electricity price in August was 33.38 PPS per kWh. This positions it as the eighth most expensive among the 33 European capitals and notably higher than the EU average of 28.79 PPS per kWh, providing a clearer picture of the actual financial burden on households. In nominal terms, without purchasing power adjustments, Nicosia's electricity price stood at 30.49 cents per kWh, making it the tenth most expensive capital.