Low Income Households Hardest Hit by Fuel Costs

In its recent "Regards" report, the national statistical agency Statec has found that Luxembourg's fuel prices are hitting lower income households hardest.

In the context of the energy transition, Statec has taken a closer look at fuel consumption and household transport means. According to data from its "Household Budget Survey", the average annual expenditure in 2017 was €1,260 for fuel for individual transport, €420 for oil and €100 for public transport on national territory.

These average values nevertheless varied greatly according to the characteristics of the households. More specifically, Statec found that whilst households with lower incomes consumed less fuel (diesel/petrol) on average, the amount of disposable income dedicated to purchasing fuel was 2.3 times higher for 20% lowest income households (2.8% of income) than for the 20% of households with the highest incomes (1.2%). Consequently, fuel costs can feel like more of a burden for lower income households.

High levels of spending on fuel in Luxembourg can be explained mainly by the importance of the automobile sector: 86% of resident households own at least one car. This figure is high also in comparison to neighbouring countries. For instance, 82% of Belgian, 81% of French and 78% of German households have at least one car. A high number of cars per household also contributes to substantial average spending on fuel with over 40% of households in the Grand Duchy possessing two or more cars (compared to 35% in France). On the other hand, 36% of the lowest income households do not have even one car, often due to a lack of financial means. 

For their part, households with a car spent on average €1,440 per year on fuel. Spending on diesel was higher among lower income households.