Fuel tax cuts from Apr. 1; Low-income residents will get €800 for energy bills

The Cabinet is allocating 2.8 billion euros for purchasing power recovery this year, Minister Karien van Gennip of Social Affairs said after the Council of Ministers on Friday. The Cabinet will also reduce the excise duties on fuel from April 1 and the VAT rate on energy as of July 1, NOS reports.

People with low incomes will receive 800 euros for their energy bill, instead of the 200 euros previously promised. The support will last at least half a year. "It is important that these people receive their money as quickly as possible so that they can pay their energy bills," Van Gennip said. Earlier on Friday, the Netherlands' four largest cities asked parliament to help low-income households more against the rising energy bills. They asked for 1,000 euros in compensation for this group.

Excise duties and VAT currently make up about half of the petrol price and about 40 percent of the diesel price, according to NOS. From April 1, the government will decrease the excise duty per liter of unleaded petrol by 17 cents and for diesel by 11 cents per liter.

On Friday, United Consumers said the recommended price per liter of Euro95 petrol at highway filling stations was €2.48, up over 33 cents since the beginning of February. The bulk of the increase occurred after the Russian invasion of Ukraine. Diesel shot up 53 cents to a recommended price of €2.37 per liter.

The VAT on energy is currently still at the high rate, which is 21 percent. From July 1, that will decrease to 9 percent.

Earlier this week, Central Planning Office (CPB) released calculations saying that the war in Ukraine is exacerbating already high energy bills and fuel prices. The office predicted that Netherlands residents would see their purchasing power decrease by 2.5 percent on average this year.

The Cabinet was hesitant to comment on what they planned to do about the purchasing power decrease, but Prime Minister Mark Rutte warned that their measures would soften the blow at most.