Dutch motorists will be spared a major hike in petrol prices in January after the outgoing cabinet decided to extend the temporary fuel tax cut for another year according to the budget the cabinet will propose on Tuesday.

Always on the third Tuesday of September, Prinsjesdag is the day on which the government presents its annual budget.

The budget plans leaked on Friday, showing that the significant reduction in fuel taxes put into place three years ago will continue for another year.

The measure was first introduced in April 2022 to offset soaring oil and petrol prices after Russia’s invasion of Ukraine, and has since been renewed annually. Without the extension, the price of petrol was set to rise by more than 25 cents per litre in the new year.

The move will cost the treasury around €1.6 billion.

Cross-border bonus

The extension will run until the end of 2026. It will then be up to the next government to decide whether to maintain the reduced excise rate from 2027 onwards.

Motoring organisation ANWB and fuel station lobby group Drive Nederland have urged the government not to allow the tax rise to go ahead, warning that otherwise the price gap with neighbouring countries would become too wide.

Filling up a car in the Netherlands has been more expensive than in neighbouring countries like Belgium and Germany for more than 15 years as a result of higher taxes.

However, several studies have shown that driving in Switzerland and Norway is even more expensive when other costs are factored in such as depreciation, interest, insurance, and maintenance.