Petrol prices set to jump by 26 cents per liter as tax break ends

Fuel prices in the Netherlands are set to rise sharply in the coming years unless the government takes action. Starting January 1, 2025, the price of a liter of petrol could increase by 25.8 cents. Additional hikes are expected in 2027 and 2030, bringing the total increase to nearly 50 cents per liter over the next five years, according to reports from AD.

The potential price increases stem from changes in European regulations and the expiration of a fuel tax relief introduced by the Dutch government in 2022. Minister of Infrastructure and Water Management Barry Madlener (PVV) warned that if the tax break is not extended, petrol prices will rise significantly in 2025. These increases are expected to continue, with further hikes scheduled for 2027 and 2030 as new European rules take effect, which will force oil companies to raise prices even higher.

The prospect of rising fuel costs has alarmed Dutch coalition members, who are already under pressure to improve citizens' purchasing power. Minister Madlener expressed concern, stating, “Mobilization must remain affordable for everyone. We see it being under pressure, and we certainly share those concerns. I hope the Cabinet can address it with the limited resources available.”

Despite these concerns, reducing fuel taxes has not been a top priority for coalition parties. While PVV, VVD, NSC, and BBB all acknowledge the importance of the issue, they are focused on broader financial goals, such as increasing purchasing power, lowering grocery bills, reducing energy costs, and making childcare more affordable.

Coalition members are reportedly wary of openly prioritizing fuel price reductions, fearing it may come at the cost of other demands. VVD leader Dilan Yesilgöz acknowledged that fuel prices would be discussed in upcoming spring negotiations but emphasized it should not dominate the agenda.

A decision on fuel taxes may not be reached until September, during the annual budget speech. Meanwhile, NSC's Olger van Dijk stressed the importance of affordable mobility for lower-income families, many of whom rely on petrol-powered vehicles. “Affordable mobility is very important to us. People on lower incomes often rely on their cars, so this needs to be carefully monitored,” van Dijk said.

Fuel station operators are urging the government to act before petrol becomes unaffordable for many drivers. Martin van Eijk, president of the Dutch Fuel Stations Association (BETA), warned AD that the price differences between the Netherlands and neighboring countries could force border gas stations out of business. “We’re looking at a price difference of 40 to 50 cents per liter next year,” said Van Eijk. “We’re advocating for the extension of the tax break on fuel.”

Although fuel prices have recently fallen due to a weaker U.S. dollar, these reductions are expected to be short-lived. With long-term increases in petrol prices projected, the Dutch government faces difficult decisions about how to balance fiscal responsibility with the financial strain on citizens.

In addition, the ANWB, the Dutch motorists' association, has called for the extension of the tax reduction introduced in 2022. A potential rollback of this tax relief could cause petrol prices to rise significantly. “The tax relief was introduced to offset rising fuel prices. This discount is still necessary and justified,” said an ANWB spokesperson. “We see more and more that the affordability of driving is under pressure. Many people in rural areas really need their car. Owning a car is not a luxury, but a necessity,” the spokesperson added. The association stressed that fuel affordability is “essential” for these individuals.

The ANWB also pointed out that the Netherlands is a leader in Europe when it comes to fuel taxes. "We are the only country that indexes fuel taxes, meaning they continue to rise," the spokesperson explained. In addition, a CO2 tax is expected to make petrol even more expensive. While the ANWB supports the transition to electric vehicles, it emphasized that most people still drive fuel-powered cars.

The BOVAG, the Dutch automotive industry association, also warned that driving could become unaffordable for many. “It’s not just after the elimination of this tax relief, there are more challenges ahead in the future,” said a BOVAG spokesperson. The organization is urging the government to come up with a long-term, sustainable plan for the future to ensure that everyone who depends on a car knows what to expect, and that mobility remains affordable. “It is now up to the government to take that step,” the spokesperson concluded.