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Energy crisis: Belgium to roll back some measures amid falling prices

08:48 08/02/2023

While many Belgian households continue to struggle with sky-high energy bills, the government is rolling back some of its measures intended to help them.

Prices have begun falling somewhat, so while the VAT will remain frozen at 6% (it was previously 21%), excise duties will compensate for the loss and the extended social tariff will be ended.

“If the crisis is receding, it’s logical that as a government you start to reduce the support measures,” Belgium’s prime minister Alexander De Croo told VTM.

The new excise duties will enter into force on 1 April.

The tariff changes are expected to affect around one million households, and exact details regarding to what extent and when it should be reversed are still being worked out.

The council of ministers has agreed so far to gradually reduce the number of households benefitting from the social tariff by the end of the year, subject to certain conditions. Originally, the extended scheme was supposed to last until 31 March of next year.

The level of advance payments demanded by energy suppliers was also taken into consideration.

When it comes to the VAT, the 6% ceiling has come at a cost of €1.3 billion in terms of the 2023 budget.

Additional excise duties are intended to partially compensate for the loss of tax revenue and, unlike the VAT, are fixed.

The government has said that in the event that prices on the wholesale markets rise to above €100/MWh for gas (according to the TTF index) and/or €250/MWh for electricity (according to the Endex index) by 1 April, the terms of this new reform will be reassessed to protect consumers.

But many consumers are already feeling as though they have been left vulnerable to a volatile market.

Energy provider Engie, which has made record-shattering profits amid the crisis, had its offices recently spray painted with the words ‘profiteer of misery’.

A group called Etoile Noire admitted to the protest action. The organisation describes itself as campaigning for the collective management of survival issues and against privatisation.

It has denounced Engie’s profits as "indecent", pointing out that the company’s net profits have more than doubled in the last six months.

Instead of passing those revenues on to struggling customers, Engie has instead decided to increase the dividends paid to their shareholders, the campaign group said.

Etoile Noire said the increase in energy bills is not a normal effect of an unavoidable situation but rather the result of political choices.

Written by Helen Lyons