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Luxembourg to cap gas price increases from October
Energy

Luxembourg to cap gas price increases from October

by John MONAGHAN 21.09.2022
Measures to tackle cost-of-living crisis came out late on Tuesday, after talks between government, employers and unions
Finance Minister Yuriko Backes, talking to Health Minister Paulette Lenert and Deputy Prime Minister François Bausch
Finance Minister Yuriko Backes, talking to Health Minister Paulette Lenert and Deputy Prime Minister François Bausch
Photo credit: SIP/Jean-Christophe Verhaegen

Luxembourg will limit further gas price increases to 15% from next month, reduce VAT and extend subsidies to help households through the cost-of-living crisis sparked by Russia's invasion of Ukraine, after days of talks between workers and employers led to a conclusion on Tuesday night.

The government-led talks led to an agreement "in principle" on the support measures, the government said in a statement issued after midnight.

Other actions include reducing the price of heating oil by 15 cents per litre, and stabilising electricity prices. 

There will be no further wage indexation - whereby salaries and pensions are automatically adjusted in line with inflation - this year, in keeping with the government's previous position. 

The next indexation is due to be paid out in April.

Luxembourg’s annual inflation rate remained largely unchanged at 6.8% in August, Statec said earlier this month, but the statistics agency has forecast even higher inflation for next year than it previously predicted. That would necessitate further rounds of indexation next year, Statec said.

The country's economy showed signs of decline in the second quarter of this year, with gross domestic product dropping 0.5% as inflation surged.


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