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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure LU-2022-16/2256 Updated – measures in Luxembourg

Reduction of fuel prices for all consumers

Réduction des prix des carburants

Country Luxembourg , applies nationwide
Time period Temporary, 13 April 2022 – 31 December 2022
Context War in Ukraine
Type Tripartite agreements
Category Responses to inflation
– Support for fuel expenses
Author Patrick Thill (LISER) and Eurofound
Measure added 13 May 2022 (updated 09 November 2022)

Background information

In the context of the war in Ukraine and its repercussion on fuel petrol, diesel and heating oil, the Government is committed to quickly taking the necessary legislative and regulatory measures to lower the consumer prices of petrol, diesel and heating oil.

After the Tripartite meeting, the government proposed a draft law. This was approved by the Government Council on Thursday 7 April. It will come into force on Wednesday 13 April 2022.

Content of measure

The consumer prices of road diesel and unleaded petrol will be reduced by 7.5 cents per litre including tax from 13 April 2022, regardless of price changes. This price reduction will be reflected directly in the prices displayed at the pump and will remain applicable until 31 July 2022. For a 50-litre tank of petrol, the saving will amount to €3.75.

Consumer prices for diesel for industrial and commercial use, as well as for diesel used for agricultural and horticultural work, fish farming and forestry, will be reduced by 7.5 cents per litre (including tax) as soon as the relevant bill is passed by the Chamber of Deputies. This measure will also remain in force until 31 July 2022.

Finally, for heating gas oil (mazout), this same reduction will apply as soon as the same bill comes into force, but will remain in force until 31 December 2022.

Regarding the financing of the measure, there is no line specified in the state budget.

Updates

The following updates to this measure have been made after it came into effect.

20 July 2022

The financial aid - decided by the Tripartite meeting and adopted by the law of 28 April 2022 - to compensate for the increase in fuel prices has been extended, by decision of the Government Council, until 31 August 2022.

The rebate of 7.5 cents per litre of petrol or diesel used as fuel will end on 31 August 2022. The same applies to gas oil used as fuel for agricultural, horticultural and forestry work and to industrial gas oil. However, the reduction applicable to the sale price of "mazout" for heating purposes remains in force until 31 December 2022.

Use of measure

No information at this time.

Contents

  • Income protection

Target groups

Workers Businesses Citizens
Does not apply to workers Applies to all businesses Applies to all citizens

Actors and funding

Actors Funding
National government
Trade unions
Employers' organisations
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Consulted
Form Consultation through tripartite or bipartite social dialogue bodies Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

  • Social partners jointly
  • Main level of involvement: N/A

Involvement

This decision was taken in the framework of the Tripartite meeting held on 22, 23 and 30 March 2022. The resulting draft law was approved by the Government Council on 7 April 2022.

Views and reactions

Approval by two trade unions: Confédération Luxembourgeoise des Syndicats Chrétiens (LCGB) and Confédération Générale de la Fonction Publique (CGFP), as well as by the Union des Entreprises Luxembourgeoises (UEL). The main union, Confédération Syndicale Indépendante du Luxembourg (OGBL), refused to sign the agreement because of differences over, for example, wage indexation.

Sources

Citation

Eurofound (2022), Reduction of fuel prices for all consumers, measure LU-2022-16/2256 (measures in Luxembourg), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/LU-2022-16_2256.html

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