Ministers take a wait and see approach to energy price measures

VVD MP Claire Martens-America and CDA leader Henri Bontebal during the debate. Photo: Remko de Waal ANP

The Dutch government cannot yet say when or if it will take concrete measures to offset the economic impact of the war in the Middle East, and there are no immediate plans to cut fuel prices, finance minister Eelco Heinen told parliament during a debate on rising energy costs on Wednesday evening.

Heinen warned that the global situation could deteriorate further and said the cabinet wants to keep financial room in reserve in case the crisis deepens. If the economic impact becomes more severe, the government must still have the means to support households that run into serious difficulties, he said.

Ministers are drawing up a list of possible measures, which is expected to be ready before the spring budget update. Measures could follow later in the spring, once the government has a clearer picture of the scale of the problem, he said.

During the debate opposition parties urged the cabinet to act more quickly, pointing to sharply rising fuel prices and the pressure on low income households.

But economic affairs minister Heleen Herbert said the government wants to avoid short-term fixes.  If the cabinet needs to intervene, “we want to focus it at those who need it most,” she said. “We are preparing for a longer crisis which will need more than a few sticking plasters.”

One option under consideration is a price cap on petrol and diesel, similar to the system used in Belgium. The proposal, put forward by GroenLinks-PvdA, will be included in the government’s review, although ministers warned that a maximum price could also push pump prices up if retailers all charge the limit.

Right wing parties, including the ruling VVD, back cutting fuel taxes instead and argue that this would be quicker to introduce.

Earlier this week, the Dutch central bank said such a measure would cost the treasury billions and would also benefit higher-income households who do not need support.

Despite the pressure on the minority cabinet, parliament has so far been unable to agree on measures that would force the government to intervene. A majority of MPs do support a further investigation of possible options and this, commentators say, means there will be no action in the short term.