Parliament unanimously approved a four-cent-per-kilowatt-hour electricity subsidy on 14 July, clearing the measure before it takes effect next month. The reduction, including VAT, will run until 31 December for residential customers using up to 25,000 kWh a year.
Bill 8707 passed with 60 votes in favour and no abstentions. It allows the government to deliver the reduction through the existing electricity compensation mechanism, so eligible households will not have to apply.
Economy Minister Lex Delles said ordinary household consumption would remain comfortably inside the limit. “A normal household uses between 4,000 and 5,000 kilowatt-hours,” he told MPs. “It does not come close to 25,000, even with a heat pump and an electric car.”
MPs backed the measure across party lines, but the debate focused on whether repeated temporary subsidies were enough or whether Luxembourg needed a clearer long-term approach to electricity prices and network costs. The vote followed parliament’s approval on 9 July of a 15-cent-per-cubic-metre gas subsidy, also including VAT and running from August until the end of December. That measure is aimed at residential customers using smaller gas meters, while some larger apartment buildings may also qualify where at least 60% of the private units are used as homes.
A €19m addition
The electricity bill originally set an €88m ceiling on the government’s contribution to the compensation mechanism in 2026. An amendment following the June tripartite agreement raised that limit to €107m to finance the four-cent reduction.
The legislative file puts the subsidy’s maximum additional cost at €19m. The €107m ceiling covers the compensation mechanism as a whole, not the new household measure alone.
The subsidy will be applied through an existing system rather than a new application-based scheme, allowing suppliers to reflect the reduction directly in customer bills. The economy ministry said it would sit alongside existing support for network costs and government funding for the compensation mechanism through 2028.
Delles said the government had treated affordability as a priority before the June tripartite agreement. “It was already important to the government in February that energy prices should remain affordable,” he told MPs.
The gas measure has an expected cost of €17.55m and a maximum budget of €20m. Those figures were set out when the government approved the implementing legislation in June.
Relief beyond power
The gas bill passed on 9 July alongside temporary support for transport companies and reductions for heating oil and diesel used in agriculture and related sectors. All three measures were approved unanimously, although MPs disagreed over whether the tripartite compromise should be reopened on questions of cost, social targeting and support for fossil fuels.
The Resilienzpak was agreed by the government and social partners after tripartite talks in May and June. Its household measures also sit alongside a five-cent reduction on petrol and road diesel introduced by regulation on 1 July.
The wider package includes tax, wage, agricultural and business-support measures as well as energy relief. The government has estimated its combined effect on public finances at €432.5m in 2026 and 2027, well beyond the cost of the electricity and gas subsidies approved this month.
