For many Dutch people, energy bills will increase in January due to high gas prices. Two of the three major energy companies started informing their customers about new variable tariffs as of January 1, 2024. The reason for the increase is the unrest in the international gas market and the increase in gas taxes.
The variable contract gas price for 1 million Essent customers will increase from 1.3271 euros to 1.4494 euros per cubic meter. The price of gas per cubic meter in Vattenfall increases from 1.2975 euros to 1.5030 euros.
According to Vattenfall, more than half of the price increase is due to the high tax on gas. Without this increase, the price per cubic meter would remain “well below the government price ceiling,” according to a Vattenfall spokesman.
The government is increasing the gas tax and reducing the electricity tax to encourage the switch from gas to electric heating. It cannot be ruled out that the gas tax increase will be discussed again due to the election victories of PVV and NSC. The Senate must approve the gas tax increase in December.
The price cap ends on January 1
Earlier this year the government introduced caps on gas and electricity prices to protect households from excessive energy prices. For gas this meant a maximum rate of 1.45 euros per cubic meter up to a consumption of 1,200 cubic metres.
Next year there will no longer be a price ceiling and households will once again be at the mercy of the market. Essent deliberately keeps the gas price just below 1.45 euros per cubic meter.
Electricity prices are falling
If the price of gas increases, the price of electricity decreases slightly. In Essent, the price of the variable interest rate will increase from 0.3904 to 0.3851 euros, and in Vattenfall from 0.3463 to 0.3394 euros. Electricity prices of both energy companies remain below the price ceiling level set by the government last year. This is set at 0.40 euros per kilowatt hour for electricity up to 2900 kilowatt hours.
Whether and how much people pay more next year depends on their contracts and the amount of gas and electricity they use. The above rates are valid for contracts with variable interest rates. There are currently around four million in the Netherlands.
More and more people are moving to a permanent contract. In March there were about two million people, now it has reached three million and the number continues to grow.
Permanent contracts also affected
People with permanent contracts have been fixing gas and electricity prices for a long time. However, Essent’s commercial director Boudewijn der Herder thinks they may also face higher energy bills due to the increase in gas taxes.
“The energy tax on gas will continue to increase and grid operating costs will increase by around 100 euros per year. Therefore, the affordability of electricity bills remains under pressure.”
Essent research shows that almost a quarter of people do not yet know that the price cap will be lifted from January 1. Six percent of people currently have a variable contract that is higher than the price cap, the Dutch Consumer and Markets Authority (ACM) said earlier this month. The regulator has warned that there are now sufficiently cheap alternatives. Some people seem to be thieves of their own wallets due to carelessness.
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
