In Northern Cyprus, warnings issued: fuel price increase threatens an economic crisis

The Turkish Cypriot Chamber of Commerce and Industry (KTTO) has issued a warning about the severe consequences of the recent rise in prices of gasoline, diesel, and liquefied gas. According to the organization, the increase in fuel costs could trigger a “domino effect” capable of undermining the economy and public finances of Northern Cyprus.

KTTO emphasized that fuel is one of the key elements of the economy: its price increase directly affects the cost of goods, transportation expenses, and citizens’ living standards. This, in turn, causes growth in wages and social benefits, increasing the burden on the private sector and the state budget.

Particular concern is raised by the narrowing gap between fuel prices in the North and South of Cyprus. The Chamber warns that this may reduce the flow of motorists coming from the southern part of the island to refuel, leading to a drop in trade revenues and tax receipts.

Furthermore, rising fuel prices and cost of living negatively affect the competitiveness of the Northern Cyprus economy, especially in sectors such as tourism and transportation. “We are in a vicious cycle that ultimately leads to economic collapse,” KTTO stated.

The Chamber urged the government to take immediate measures to stabilize the situation: tighten budgetary discipline, reduce public spending, support small and medium enterprises, and maintain mechanisms to stimulate trade with the southern part of the island. According to KTTO experts, without such steps the country could face a debt crisis and further inflation growth.