Dutch government won't increase excise duties on petrol, diesel on January 1

The government won’t increase the excise duties on petrol and diesel on January 1 as it planned. The Cabinet has many doubts about the majority-supported VVD proposal to that effect, especially because of how the liberals want to finance the measure. But the Cabinet must “keep to motions” as long as they are feasible, Finance Minister Sigrid Kaag said in parliament on Thursday, RTL Nieuws reports.

The government previously temporarily reduced the excise duties on motor fuels as a financial support measure for the high energy prices. The government planned to reverse the measure on January 1, resulting in much higher fuel prices.

The VVD proposed to keep the excise duties low and to raise the 1.2 billion euros needed for the measure by taking money from the National Growth Fund. A parliamentary majority supported the proposal.

In a letter to parliament on Friday, the Cabinet pointed out that taking money from the National Growth Fund to lower fuel prices goes against the budget rules. But in the debate on Thursday, Kaag acceded that the budget rules are “not laws, but a guideline.” She stressed, however, that the budget deficit will decrease if the money comes from the National Growth Fund, which is filled with borrowed money.

The VVD faced criticism in the debate for wanting to take money from the National Growth Fund to lower fuel prices. But financial spokesperson Eelco Heinen stuck to the plan. According to him, it was justified “to use some of the money that is now unused on the shelf and that we are not doing anything with to provide some breathing room for middle incomes again.”

At the insistence of SP parliamentarian Mahir Alkaya, Kaag said right out that she would implement the VVD’s plan.