Government seeks to end 'fuel tourism' in the long-term

Is the government working on new support measures for consumers and businesses affected by the surge in energy prices? Perhaps in the form of an "energy cheque", as proposed by Minister for Mobility François Bausch? Following the government council meeting on Friday morning, Prime Minister Xavier Bettel and Minister for Energy Claude Turmes will hold a press briefing at 1pm to discuss the energy crisis.

The French government chose to provide direct aid to motorists by increasing its fuel discount from 18 to 30 cents per litre on 1 September. While filling up the tank has been more appealing in the French region of Lorraine since Thursday, as was to be expected, the Luxembourgish government will not go back on its decision.

The government "does not plan to extend the 7.5 cents discount on a litre of petrol and diesel, or to follow the same path as France," Minister for Energy Claude Turmes stated unequivocally on Friday in his reply to a parliamentary question by MP Fred Keup from the Alternative Democratic Reform Party (adr), which focused on the substantial state revenues generated by fuel tourism.

Same impact on state revenues

Luxembourg's decision to deviate from the French discount strategy was calculated. Speaking to our colleagues from RTL 5 Minutes, Turmes assured that based on the "latest estimates," the expected loss of tax revenue for Luxembourg as a result of the French discount "will be of the same order of magnitude" for the Grand Duchy as the cost of the measures taken by France if Luxembourg made the same choice.

The Minister for Energy stresses that Luxembourg is committed to fighting climate change and "wants to reduce CO2 emissions by 55% by 2030".

To achieve this, the government wants to "gradually reduce the sale of petrol and diesel, with the goal of reducing the number of people coming from abroad to Luxembourg to fill up their tanks," Turmes explained.

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The Grand Ducal regulation of 22 June 2022 sets out the reductions in greenhouse gas emissions for various sectors until 2030. The transport sector is a major polluter and will have to reduce its CO2 emissions from 5.27 million tonnes in 2021 to 3.05 million tonnes by 2030.

A European solution for lowering prices

"The government is taking the rise in energy prices very seriously," the Minister stressed, before pointing out that the government has already introduced substantial financial support measures. Turmes notably referred to the decisions taken during the "energy" tripartite, which included direct aid of "€923 million and state guarantees to the tune of €500 million to support residents and businesses in these difficult times". In addition, the Minister also mentioned the introduction of the energy tax credit and the energy bonus for low-income households.

The issue of high energy prices requires "first and foremost a European approach and measures, because this is the only way to stabilise and lower energy prices throughout Europe", the Minister for Energy stated. This topic was also brought up during discussions between Prime Minister Xavier Bettel and French President Emmanuel Macron in Paris earlier this week.

The European energy ministers will convene on 9 September 2022 to discuss the steps to be taken in this direction.