Discounts “far from sufficient”

The Luxembourg Consumers’ Association (ULC) criticizes both the level and the duration of government energy price reductions. Criticism is also voiced in the House of Representatives.

The Chamber of Deputies this week validated two bills aimed at offsetting the impact of rising energy prices primarily on residential customers, but also at least partially on businesses.

The heating oil discount of 7.5 cents was accepted unanimously. The assumption of the gas network costs by the state received the green light from 58 of the 60 MPs.

The two texts are part of the “Energy” package agreed on February 28 and the “Solidarity” package signed on March 11 after tripartite negotiations. The state is providing a total of 47 million euros for these two measures. A sufficient amount to really help the 59,000 oil-fired households in particular?

The Luxembourg Consumers Association (ULC) denied this. More generally, it considers that “the measures (…) taken by the tripartite (…) are far from sufficient to even come close to guaranteeing the purchasing power of consumers”.

This criticism is accentuated with regard to energy. “The per se ridiculous subsidy of 7.5 centimes per liter on petrol, diesel and heating oil will not be nearly enough to even come close to offsetting the previous drastic price increases,” the organization said in a press release issued on March 28.

Strong price increase this Saturday

On April 13, the day the discount of 7.5 cents came into effect, the price of petrol was 1.632 euros per liter (Super 95) and 1.726 euros (Super 98). This Saturday, at EUR 1.744 and EUR 1.841 per liter, i.e. 0.112 cents and 0.115 cents more than on April 13, a new high since the introduction of the discounts was reached.

Diesel, which started at 1.643 euros per liter, goes to 1.841 euros this Saturday, 0.198 cents more than when the government rebates were introduced.

Heating oil also peaked this Saturday with a price of 1,325 euros (10 ppm) and 1,319 euros (50 ppm) per liter. Basically, the price goes down from Monday, the effective date of the 7.5 cent discount, to 1,250 euros and 1,244 euros.

Gasoline prices are now 15 times higher than before the health crisis began. From 20 euros per MWh we went over 300 euros.

Again, the ULC believes that the government’s support measures “are not sufficient to maintain consumer spending power in the face of expected inflation and in particular the dizzying rise in energy prices”.

Not only the size of the rebates is considered insufficient, but also the duration of the two measures, which is limited to July 31 for fuel and December 31 for heating oil.

Consumer advocates continue to advocate the introduction of an increase in the tax deduction amount, a cap on all energy prices, a reduction in excise duty and value added tax, and the suspension of the CO tax2“as is the case in some other EU countries”.

“In Luxembourg, a country of services, not only many employees but also companies depend on their vehicles,” recalls the ULC, which criticizes the government for a “more flanking anti-consumption policy (…)” of pure ideology , than to take into account people’s daily concerns and needs”.

Towards a tax credit or “good energy”?

During the debate on the two legal texts on Wednesday and Thursday in the House of Representatives, certain points of criticism were also raised. The CSV says it has “no problem” giving a discount of 16 eurocents, the maximum allowed by the EU.

The ADR advocates a strong tax cut and the abolition of the CO2 tax. The Pirate Party considers the 7.5 cents to be purely a “subsidy for tankers”. Déi Lénk denounces speculation about energy prices.

Josée Lorsché (déi gréng) supports the two measures without commenting too much on what Deputy Prime Minister François Bausch had said about the “absurd” nature of the fuel rebate.

If the aid measures are nevertheless extended beyond July 31 or even December 31, the Greens want the introduction of a tax credit to combat energy poverty or even “good energy”.

Luxembourg’s energy mix contains 13.8% Russian gas

What will happen to the security of energy supply if the Grand Duchy is again cut off from the Russian grid? “We have prepared for all scenarios over the past few months,” says Energy Minister Claude Turmes. Questioned in the plenary by Jessie Thill (déi gréng) MP, the minister recalled that Luxembourg was very little dependent on the Russian network.

The latest figure from Brussels think tank Bruegel reports imports of 13.8% of Russian gas. This number is presented in response to a parliamentary question by Paul Galles (CSV).

However, the fact that the gas is listed on the stock exchange makes it “difficult to assess with certainty the share of Russian gas in Luxembourg’s energy mix”. It should also be noted that the imported gas is routed through Belgium.

The share of gas from Norway and LPG deliveries arriving in the port of Zeebrugge have increased significantly since 2021.

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