Dutch cabinet commits €1 billion to energy crisis relief (but don’t expect cheaper petrol)

Workers, van owners, businesses, and households struggling with high energy costs are set to receive targeted relief under a government package worth €1 billion.

According to NOS, ministers will sign off on the proposal on Friday. Thereafter, the minority cabinet plans to consult opposition parties on whether their measures need tweaking.

As the Strait of Hormuz remains blocked, motorists in the Netherlands are victims of soaring petrol prices: up to €2.50 a litre.

However, the cabinet’s proposal has no impact whatsoever on prices at the pump.

No cut at the pump

In Western Europe, things are never nearly as expensive as their taxes make them. To many, an easy solution to rising fuel prices would be to reduce the duty.

However, while Germany has moved to cut its excise duty by 17 cents per litre, the Dutch government has explicitly eliminated this solution. As expected, the reasoning is practical.

A reduction of 10 cents per litre would cost the government around €1 billion, and for that high a price, the motorist wouldn’t benefit too much.

Moreover, the situation on Hormuz remains uncertain, so ministers are choosing caution over crowd-pleasing.

The cabinet also believes that a lower excise duty on petrol could drive up consumption, which runs counter to the cabinet’s sustainability goals.

What the money actually covers

So where does the money go? The support package is split across low-income households and small business owners.

The energy emergency fund (energienoodfonds) receives €50 million to help the lowest-income households who can no longer keep up with their bills.

The proposal sets aside extra funding for better insulation, which would ensure lower energy bills for both homes and businesses. In the future, the cabinet also plans to reserve money to subsidise green energy for businesses.

Tax talk

Workers who commute by car will see their tax-free travel reimbursement (onbelaste kilometervergoeding) rise from 23 to 25 cents per kilometre.

For example, a commuter covering 400 kilometres a week could now cut €8 back per week. This is, of course, only if your employer is nice enough to give you a travel allowance.

Meanwhile, small entrepreneurs with delivery vans or light commercial vehicles dubbed “grey license plates” will see their road tax halved for the rest of the year.

What do you think of the proposal? Tell us in the comments.