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Electricity Authority Enacts 22% Rate Increase Amid Escalating Energy Costs

by THEFUTURE.TEAM

June 1, 2026

Electricity Tariff Increase Raises Concerns Among Businesses

Businesses in northern Cyprus are warning of mounting cost pressures after the electricity authority announced a 22% increase in power tariffs, set to take effect in June. The decision has sparked concern across the industrial sector, where rising energy costs are already weighing on competitiveness and operating margins.

Cost Pressures And The Need For Adjustment

According to the electricity authority, energy costs have increased significantly over the past 14 months without corresponding tariff adjustments. Officials said a smaller increase of between 10% and 15% had previously been proposed but was not approved by the council of ministers. Since then, fuel prices have risen by more than 60%, while the cost of living has increased by 38% and exchange rates by 18%. The authority argues that the latest tariff adjustment is necessary to maintain the financial sustainability of the electricity system.

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Industrial Impact And The Risk Of Losing Competitiveness

KTSO President Ali Kamatzoglou said electricity remains one of the largest cost components for local manufacturers and producers. According to Kamatzoglou, industrial electricity prices currently stand at around 10 Turkish lira per kilowatt-hour, compared with approximately 3 Turkish lira in Turkey, placing businesses in northern Cyprus at a competitive disadvantage. He warned that an increase to 12.5 Turkish lira per kilowatt-hour could further weaken the sector’s competitiveness and put additional pressure on industrial activity.

Sector-Specific Concerns And Calls For Government Intervention

Concerns extend beyond manufacturing to sectors including food production, construction, cleaning products and water supply. Industry representatives estimate that around 25 producers and approximately 1,500 employees could be affected by higher electricity costs. Kamatzoglou called on the government to introduce support measures and develop a longer-term strategy to help businesses manage rising operating expenses while maintaining competitiveness.

Economic Implications

Business groups are now awaiting a response from policymakers as concerns grow over the broader economic impact of the tariff increase. Industry representatives argue that without targeted support, higher energy costs could affect production levels, investment decisions and employment across multiple sectors.

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Cyprus Fuel Prices Jump 20.5% As Energy Costs Rise Across The EU

Cyprus recorded a 20.5% year-on-year increase in the prices of fuels and lubricants for personal transport in May 2026, according to Eurostat data released on Monday.

The increase was broadly in line with the European Union average of 20.7%, with fuel and lubricant prices rising across all EU member states during the period.

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Cyprus Tracks The EU Average

Among EU countries, the largest annual increases were recorded in Bulgaria (33.9%), Luxembourg (32.2%), Lithuania (30.8%) and Romania (30.4%). At the other end of the scale, Hungary registered the smallest increase at 3.5%, while annual growth ranged from 12.7% in Poland to 29.2% in France across the remaining member states.

Eurostat noted that fuel and lubricant prices generally declined across the EU until February 2026 before moving higher in subsequent months.

Diesel And Petrol Follow Different Paths

Across the European Union, diesel prices increased by 29% in May 2026 compared with the same month a year earlier, while petrol prices rose by 16.2%. Monthly trends, however, were more mixed. Between April and May 2026, diesel prices across the EU fell by 5.8%, whereas petrol prices increased by 0.8%.

In Cyprus, diesel prices declined by 1.5% over the same period. Although lower than in April, the decrease was less pronounced than in Germany (-11.9%), Greece (-8.5%), Estonia (-8.4%) and Ireland (-8.1%).

Petrol prices moved in the opposite direction, rising by 2.1% between April and May. A similar pattern was observed across much of the EU, with 23 member states reporting monthly increases. Italy recorded the largest monthly rise in petrol prices at 6.9%, while decreases were reported in Germany (-5.6%), Ireland (-2.0%) and Sweden (-0.7%).