Growing pressure on Dutch gov't to provide energy bill, fuel price relief

Today, the Dutch Cabinet will debate the consequences of the Iran war with the Tweede Kamer, the lower house of the Dutch parliament. The government is facing growing pressure from opposition and coalition parties, advisory bodies, and trade unions to provide relief for households.

On Tuesday, De Nederlandsche Bank (DNB) warned that the Iran war would mean higher inflation and lower economic growth for the Netherlands and hit households’ purchasing power. Though the central bank stressed that the effects will be more limited than in the 2022 energy crisis, which was sparked by Russia's invasion of Ukraine.

The DNB stressed that the government finances are not in a great position. If the government does decide to take income support measures for citizens, the measures must be temporary and very targeted to only the households that need them, the regulator said.

On Tuesday, the Tweede Kamer almost unanimously supported a proposal by GroenLinks-PvdA MP Esmah Lahlal to reopen the Temporary Emergency Energy Fund.

The temporary fund was established during the 2022 energy crisis. The government and energy companies contributed money to it to help households that could not afford their much higher energy bills. According to parliament, the temporary fund “offers an existing implementation structure” with which “targeted support can still be quickly provided to households with high energy costs.”

The fund can help people “with the smallest wallets and the highest energy bills” in a targeted manner, Prime Minister Rob Jetten acknowledged. “That is a measure you should have ready to deploy anyway,” he said before the debate, adding that the Cabinet was already working on it.

The National Institute for Budget Information (Nibud) called on the government to “think ahead” about targeted measures to support households. This can prevent people with the least disposable income from getting into trouble. “Unlike the previous energy crisis, we can see problems coming from afar, and that provides the opportunity to stay ahead and offer support where it is most needed,” said Nibud.

The agency points out that the increased oil and gas prices are currently most noticeable at the fuel pump. "If the war continues, the supply of raw materials will remain a problem. In the longer term, this will also affect energy bills and grocery prices," the institute warned.

The trade union FNV is advocating for a more generous tax-free travel allowance and a price cap on petrol and diesel at the pump. Currently, employers can reimburse their staff up to €0.23 per kilometer of commuting. FNV wants another 3 cents per kilometer. “Many low- or middle-income workers need their car to get to work. FNV is pushing for an adequate travel allowance in collective bargaining agreements. However, there must be sufficient room for this through taxation.”

FNV also wants the Cabinet to investigate the Belgian system of maximum fuel prices. In times of strongly fluctuating oil prices, that system temporarily dampens the increases at the pump.

The trade union also advocated for the reintroduction of the emergency energy fund and a higher subsistence minimum - the minimum amount of money a person in the Netherlands needs to live on. This amount determines whether someone is entitled to certain allowances or social assistance benefits.