Cabinet wants to lower excise duties on fuel after all

High petrol price

Driving has become unaffordable. The war in Ukraine, but also the corona crisis, inflation and of course the high excise tax on fuel are causing record prices at the pump. In the past year, the price of petrol rose by no less than one euro. Time for the government to intervene, you might say. Yet only a few days ago, Minister Kaag of Finance indicated that she did not see a reduction in excise duty on petrol and diesel. Even a temporary reduction was not possible. According to the AD and several sources from The Hague, it is now going to happen. But the flag can’t go out yet…

Temporary reduction

This is a temporary reduction, which moreover will not come when motorists desperately need it: immediately. The reduction will not take effect until July 1, 2022. The Dutch will therefore experience a lot of pain at the pump for a few months.

Is gasoline affordable now?

In the Netherlands, more than 60% of the fuel price consists of excise duty and VAT. In 2022, the Netherlands will levy no less than 83.2 cents on a liter of petrol and 53 cents on diesel. The entire fuel price, including excise duty, is subject to a further 21 percent VAT. The amount of VAT therefore rises as fuel prices rise.

Thanks to the tax cut, the price for a liter of petrol and diesel is expected to fall by a maximum of 20 cents, although it is not yet known exactly how much less excise duty will be levied. A similar plan is on the table in Belgium, but the government is taking action much faster there.

Electricity also cheaper

Also good news for motorists who drive electrically: gas and electricity would temporarily fall under a low VAT rate of 9 percent, instead of 21 percent. This allows you to charge your car at home considerably cheaper. Again, only from July 1. Just when your solar panels are working overtime so…

Also read: The 10 cheapest gas stations per province (and throughout the Netherlands)