A new €50 million package to support the society and businesses from electricity price increases for both residential, commercial and industrial users, amounting to €50 million, has been announced by the Government, which will cover from 50% up to 85% of the expected new increase in electricity tariffs, with coverage reaching 100% for the vulnerable groups.

As announced by the Minister of Finance, Constantinos Petrides, following a Cabinet meeting this grant will also cover the reintroduction of VAT on electricity at 19%. The Government will pay this money to the EAC, which will adjust the tariffs covering the July-August period accordingly, to be sent in September.

The new package comes in addition to the packages already implemented, the cost of which exceeded €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 in his remarks, adding that this measure also promotes savings, which he said is very important.

"From the first moment we did not hide the truth, electricity prices 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 in terms of complete decoupling from fossil fuels," he said.

The Minister of Finance said that VAT on electricity is being brought back to 19%, stressing however that this will be covered by the government's sponsorship.

"The state sponsorship will cover two parts, the percentage of the increase and the VAT," he said, explaining that the subsidy takes a different form.

"Instead of lowering the VAT, this difference will be subsidised by the state," he said, adding that in the invoices sent out in September, there will be a 20% to 30% reduction depending on the tariff.

Responding to a question, Petrides explained that the subsidy will be paid to the EAC and therefore the invoice received by the citizen will record the original price, the state subsidy and the amount to be paid by the citizen.

In her own statements, Energy Minister Natasa Pilides, after recalling that saving and installing photovoltaic systems is the best method to permanently reduce the cost of electricity, stressed that in addition to these measures, the Ministry's plans, which have a much larger budget, continue to be in force.

She pointed out that until 2020 €8 million per year were allocated to the subsidy plans, while the budget for 2021 will exceed €120 million. At the same time, plans for the installation of photovoltaic panels, roof insulation and the installation of water heaters are running, as well as specific plans for vulnerable groups.

The €40 million "Save - Upgrade" project for businesses is also running, which encourages savings and subsidises the installation of photovoltaic panels, "so that we achieve a permanent reduction in the cost of electricity”.