Minister Rob Jetten (Climate and Energy) announced this on Budget Day. On Tuesday morning, the cabinet and the four coalition parties put the finishing touches on the energy emergency aid package for private individuals and SMEs. The extra aid should prevent families and SMEs from being cut off from gas and electricity this winter, because they can no longer pay their energy bills.
If the gas price does not rise too high next year (and the costs for the treasury are therefore not too bad), the government will lower the maximum price for natural gas to 1.20 euros. A gas price of 1.50 euros per cubic meter is slightly above the level that people paid at the beginning of this year, but 70 cents for electricity is significantly higher than the prices in January 2022.
The government therefore compensates gas consumers more than electricity consumers. This may be due to the idea that affluent households use relatively more electricity (because they have more expensive electrical appliances) and less gas than poorer families (because they live in better insulated houses). By subsidizing the gas price more than the electricity price, the measure focuses slightly more on poorer energy consumers.
Energy surcharge for minimums remains intact
Those at or below 120 percent of the social minimum will also receive the energy surcharge of 1,300 euros next year. Municipalities may already pay out part of this this year to help these households through the winter. The fuel excise tax will also remain extra low next year, which in turn is beneficial for the middle and high incomes. After all, they are more often car owners than the social minimum.
The cabinet is also pushing for an energy emergency package that is specifically aimed at SMEs with a high energy bill (such as bakers, butchers and horticulturists). There will probably be a similar arrangement to the Compensation for Fixed Lasten (TVL), the compensation that some entrepreneurs received during the corona crisis. The TVL compensated entrepreneurs who suffered at least 30 percent loss of turnover (including catering companies that were forced to close their doors) for the fixed costs that they had to pay during the lockdowns. Minister Micky Adriaansens (Economic Affairs) is now working on similar compensation for SMEs with extreme energy costs.
The price ceiling will in any case apply until the end of next year. The maximum rate applies to an annual consumption of 1,200 cubic meters of natural gas and 2,400 kWh of electricity. This roughly corresponds to the annual consumption of the average Dutch household. The energy suppliers have agreed with the cabinet that they will reduce the monthly installments as of 1 November for customers who at that time pay more than the maximum amounts applicable from that date.
Measures cost 5 to 10 billion
How much the measure will cost the treasury depends on the development of gas prices. The cabinet assumes a cost of between 5 and 10 billion euros. The government has already covered 5.4 billion euros of this by reversing the proposed reduction in energy tax in 2023.
To partially compensate for the increased energy prices, the government had lowered the energy tax on gas and electricity as of 1 July this year. In the purchasing power package that the coalition put together at the end of August, it was still foreseen that the tax reduction would continue in 2023, but the cabinet is now coming back to that. The government is also counting on help from the European Union to finance the expensive price ceiling. The European Commission wants to skim off the high profits of oil and gas companies and redistribute the proceeds among the 27 member states. This could generate additional income for the Dutch government next year.
In addition to the price ceiling, the government, together with the energy suppliers, is setting up an emergency fund for the most serious cases among the energy poor. They will be forgiven part of their energy debt and a generous payment arrangement for the remainder.