Dutch government considers measures to combat rising petrol and energy prices

From cutting taxes on fuel and energy to raising the minimum wage, several measures are being considered to cushion the blow of the rising cost of living for residents in the Netherlands caused by the ongoing war in the Middle East.

Tax breaks for petrol and energy on the table in the Netherlands

In a letter to the House of Representatives (Tweede Kamer), the cabinet has provided a number of possible solutions to reduce the economic impact of the war in the Middle East on people in the Netherlands. Measures put forward include an energy price cap, similar to the one introduced in 2023, temporary cuts to energy tax and fuel excise duties, and an increase in the maximum tax-free travel allowance for businesses.

Other options that are also being considered are raising the housing allowance and the statutory minimum wage. The reintroduction of the energy emergency fund is one solution on the table to help people with lower incomes who can not afford to pay their rising energy bills.

In 2022, this fund allocated 800 euros in compensation to 800.000 households. Other alternatives are still being debated. "But the reintroduction of the emergency fund is the most concrete; that should be achievable before the coming winter,” a spokesperson for the Ministry of Economic Affairs and Climate Policy told AD. “You want to provide targeted help to people who really need it, and that instrument is suitable for that."

Immediate action not needed, say ministers

While measures are being considered, these are all possibilities if the situation worsens rather than a definite plan. According to AD, the cabinet is hoping that none of these measures will need to be implemented before the summer.

However, both the coalition government and the opposition parties acknowledge that action may need to be taken sooner if energy prices continue to rise. The government is not too worried about this though, believing that a spike in prices like in 2022 when Ukraine was invaded is not likely. 

When the war in the Middle East first broke out, the Dutch finance minister said it was “too early to panic”, stating that the Netherlands is less vulnerable to gas price spikes. The Netherlands also recently released some of its oil reserves and any gas shortages are being supplemented by liquefied natural gas from the US. 

Dutch petrol prices continue to rise

Rising oil prices mean drivers have been paying more at the pump in recent weeks. This is likely to get worse as petrol prices grow ever closer to a record high. 

On Tuesday, March 17, the suggested retail price for Euro95 petrol rose to 2,504 euros per litre, almost 2 cents more than on Monday and very close to the record price of 2,505 euros per litre set in 2022. Diesel prices were recently also above 2,50 euros per litre but have since dropped slightly to 2,48 euros per litre.