Big fuel price increase looming as deferred tax hikes take efffect
Netherlands residents can expect a sharp increase in petrol and diesel prices on January 1 if the outgoing or new Cabinet doesn’t intervene. Due to deferred tax increases, a liter of petrol will become almost a quarter more expensive, and diesel prices will increase by around 15 cents per liter, the Telegraaf reports based on figures requested from the Ministry of Finance.
The looming price hike is due to various temporary government measures to protect purchasing power that will expire at the end of this year. A large part of that is the government cutting excise duties on petrol and diesel shortly after Russia invaded Ukraine in February 2022. Just before the parliamentary elections in November, parliament voted to keep the lower excise duties in place for another year, at a price tag of around 1.2 billion euros.
Fuel prices will also be adjusted for inflation again in 2025—the Ministry currently expects a 1.3 percent inflation correction, according to Telegraaf. All in all, the Ministry expects excise duties and VAT to amount to 23.05 cents per liter of petrol and 14.93 cents per liter of diesel as of January 1.
And that while fuel prices have increased considerably in recent months. Israel’s war on Gaza in the Middle East has led to higher oil prices. And with Iran joining the war with an attack on Israel this weekend, an end to the unrest seems far out of sight. Oil prices will likely increase further, also increasing the petrol and diesel prices. Last week, the average recommended price was 2.27 euros for a liter of petrol and almost 2 euros for diesel.
Formation parties’ response
BBB MP Hek Vermeer thinks parliamentarians should curb the fuel prices again. “We must prevent the difference with neighboring countries from becoming even greater,” he told the Telegraaf. “Three-quarters of the Netherlands has now become a border region, making it interesting to refuel across the border. And it goes beyond that. They also do the rest of their shopping there and eat a schnitzel there. The tax increase yields something on paper, but also costs hundreds of millions in lost turnover and, therefore, tax revenue.”
VVD parliamentarian Wendy van Eijk said her party is paying attention to the problem but hasn’t taken a position. The NSC also hasn’t taken a position yet, but MP Folkert Idsinga told the newspaper that the party aims for “limited differences with other countries” when it comes to excise duties on fuel. PVV MP Elmar Vlottes, responsible for taxation in the parliamentary faction, did not respond to the newspaper’s questions.
