Belgium’s Energy Shock Returns, but Not the Money

Energy prices are climbing again in Belgium, and so is an uncomfortable question: can the country repeat the sweeping support measures it rolled out during the 2022 energy shock? According to economists and officials interviewed by RTBF, the crisis may look familiar, but the fiscal room that made the earlier response possible has largely disappeared.

The renewed surge is driven by the war in the Middle East. Since US and Israeli strikes on Iran began on 28 February 2026, crude oil prices have risen, pushing up pump prices and household energy bills alike. Diesel has crossed well above 2 euros per litre, heating oil has hit records, and by late March the average energy bill for a household on a variable contract had already climbed by roughly 45 euros since the start of the month.

A Sequel Nobody Wanted

For Bertrand Candelon, an economist and professor of international finance at UCLouvain, the recurrence is almost cinematic.

“I have the impression of watching the film Groundhog Day: at each crisis, we find ourselves repeating the same problems and the same solutions,” he told RTBF. His central warning is blunt: “Unfortunately, now we have less budgetary room.”

In 2022, after Russia’s invasion of Ukraine, the federal government led by Alexander De Croo deployed a broad arsenal: a temporary VAT cut on energy from 21% to 6%, reduced fuel excise duties, direct household aid, and business support schemes. At the European level, a temporary solidarity contribution targeted excess profits in the oil, gas, coal and refining sectors.

That playbook is far harder to reopen today. Candelon had already sounded the alarm in March, telling RTBF that Belgium was out of money. “The same questions arose in 2020 during the coronavirus crisis and in 2022 after the war in Ukraine. At the time, there were support policies. But now, we no longer have money,” he said.

Why the Fiscal Space Has Closed

The numbers explain the caution. Belgium’s federal debt reached 565.42 billion euros by the end of February 2026. Gross public debt stood at 107.1% of GDP in the fourth quarter of 2025, making Belgium the fourth most indebted country in the European Union. Debt interest alone cost more than 10 billion euros last year.

The De Wever government, in office since February, must find at least 10 billion euros in savings over the remainder of the legislature, and the Prime Minister’s opening budget note on 21 September floated an effort of up to 14 billion euros.

Candelon contrasts Belgium’s position with that of countries that acted quickly in 2026. “They have an annual public deficit below 3%. So they have room to help… Here we are in a situation where there is no more room, no more fiscal space, no more money,” he said. Spain, he notes, cut its pump tax from 21% to 10%, giving consumers roughly 29 cents per litre off petrol 95 and 23 cents off diesel, with similar measures in Italy, Germany and Portugal.

His explanation for the divergence is structural. Those countries endured painful eurozone adjustments in 2012-2014, cleaning up their public finances. “Like France, we had the good fortune not to suffer the 2012-2014 crisis, but we have been paying for it since 2020 because we did not clean up our budget,” he told RTBF.

A Tax Bill Built Into the Pump

A large part of the debate comes down to what consumers actually pay at the pump. “Of the 2.50 euros of diesel we pay at the pump, half comes from the product and margins, and half from taxes,” Candelon said. That makes taxation an accessible lever for governments—but cutting it also means less revenue.

“If we lower taxes to raise other taxes, we take back with one hand what we give with the other,” he warned. “When we go to the pump, we pay part of the public deficit.”

That tension is precisely what has divided Belgium’s governing coalition. As La Libre reported, the energy price surge has widened a rift between the two main right-of-centre partners. The N-VA places a return to budget balance above all else, while the liberal MR prioritises lower taxation—despite their programmes being described as “identical to 95%.”

A Coalition Divided

The fault line runs through the “Arizona” coalition. The MR and Les Engagés have pressed for action, while the N-VA and CD&V have prioritised budget discipline. In a Chamber debate on 2 April, Prime Minister Bart De Wever rejected the idea that the crisis creates room for intervention.

“Permit me to bring a little realism to this debate, some serenity and some seriousness… Claiming that this crisis would create budgetary margins allowing us to throw money from a helicopter is not true,” he said, as RTBF reported. “We must refrain from intervening,” he added, pointing to inflation, indexation and rising debt interest costs.

Opposition parties have been less restrained. Marc Lejeune of Les Engagés asked whether the government could “sit with arms crossed,” while Patrick Prévot of the PS said citizens had been “paying for five weeks” while the government “looks elsewhere.” Sofie Merckx of the PTB accused the government of deciding “that people will pay the price of the war.”

A RTBF survey of party positions captured the breadth of competing proposals: the MR and Les Engagés championed the “cliquet inversé,” or inverse ratchet; Les Engagés also floated gas price caps, monitoring of windfall profits and targeted aid; the CD&V remained “prudentissime”; and the opposition PS, PTB and Ecolo demanded direct action, with the PTB estimating 74 million euros in extra VAT revenue and Ecolo proposing a 1-euro public transport ticket.

The Inverse Ratchet, Explained

The “inverse ratchet” has become the focal point of the debate. The mechanism works like this: when fuel prices rise, the additional VAT revenue the State collects is offset by a cut in excise duties, so the government does not profit from the price spike.

Energy Minister Mathieu Bihet told the Chamber that the State “does not enrich itself” on rising energy prices, and that the inverse ratchet “can help households directly affected by price rises because they need their car to get to work.” Deputy Prime Minister David Clarinval wants to devote 100 million euros of additional excise revenue to activating the mechanism, which he said would “return these 100 million euros to citizens,” according to L’Avenir.

Economists see the measure as useful but limited. Julien Vandernoot of UMons said the State “can help, but in a targeted or moderate way, for example by establishing an inverse ratchet on excise duties… But it’s marginal, it won’t give us a litre of petrol at 1.10 or 1.50 euros.”

As La DH reported, the federal executive ultimately opted for an approximately 80 million euro support package in late April, including a tax incentive to increase the mileage allowance. But opposition MP Jeroen Van Lysebettens of Groen countered that reopening the ratchet question amounts to conceding “that the April measures are not working.”

Beyond the Pump

The debate extends far beyond motorists. Candelon warned that energy-intensive industry faces a competitiveness threat, and he proposed zero-interest loans and State guarantees to help businesses and the self-employed spread costs rather than relocate production. He also argued that Belgium, as a small state, has “almost zero” negotiating leverage against energy multinationals—making a more active European policy essential.

His deepest concern is structural. “At one moment or another, we have to stop this dependence on fossil fuels,” he said, warning that Belgium cannot keep replaying the same crisis every few years. “We can’t have 2022, 2025, 2026, maybe 2029, and always have the same questions. I understand that at some point the population won’t take it anymore.”

What to Watch

The immediate focus is Belgium’s budget. De Wever has given coalition partners until Thursday 24 September to agree, or the government could fall. Meanwhile, a small piece of relief arrived on 23 September: the diesel price fell by about 10 cents. But with oil prices described by Candelon as a statistical “random walk” that is “almost impossible to predict,” the deeper question remains unanswered—whether Belgium can break its cycle of short-term fixes and finally insulate households, businesses and public finances from the next shock.