Netherlands declines to follow German example of fuel tax cuts
The Dutch cabinet does not want to follow Germany’s example of cutting fuel excise duties, even as pressure grows in the Netherlands over high energy prices, AD reports.
Within the governing coalition of D66, VVD, and CDA, a general reduction in fuel excise duties is not expected. Officials argue that such a move is too costly and lacks sufficient targeting. A cut of 10 cents per liter would cost the Dutch treasury about 1 billion euros. Ministers argue that broad reductions would spread benefits too widely rather than focus support on households and businesses most affected by rising costs.
The cabinet is preparing a package of measures to address high energy prices. Officials say the longer prices remain high, the greater the pressure to act, but fiscal space is reportedly limited due to major planned spending commitments, particularly in defense.
Finance Minister Eelco Heinen is expected to weigh options as the government reviews possible measures this week. Among proposals under consideration is a reduction in motor vehicle tax for all drivers, though officials acknowledge the change would still be a broad, non-targeted measure. More focused options include discounted public transport fares to encourage off-peak travel and selective tax relief for commercial vans.
Subsidies for the fishing sector are also being discussed due to high fuel costs, though ministries are reportedly trying to distinguish genuine economic hardship from longstanding sector lobbying. In addition, officials are examining a potential emergency fund for households unable to pay energy bills, along with possible increases in tax-free commuting allowances and employer-supported public transport reimbursements.
Experience from previous crises also shapes the cabinet's caution. After Russia’s 2022 invasion of Ukraine, fuel excise reductions were introduced as temporary relief but have since been repeatedly extended.
Minister Dilan Yeşilgöz defended the restrained approach, saying, "You can only spend that euro once. If the situation continues longer, it is very good that you keep a cool head and consider how to support the people who need it most. Because it is tough now, but it may become even tougher.”
According to AD's insiders, the cabinet is working with projections from the Netherlands Bureau for Economic Policy Analysis (CPB), which suggests inflation could rise by another 1.5 percent. Officials note that earlier forecasts during the 2022 energy crisis were more severe, but current geopolitical developments have made projections more uncertain.
A decision on a package of measures is expected Friday, with a presentation planned for Monday. However, sources in The Hague say expectations of a large-scale intervention remain low.
