The Council of Ministers aims to meet on Friday 3 April to discuss urgent matters in the country. Although the agenda has not been disclosed, the Fuel Decree is certainly on the table. In fact, on Tuesday 7 April, after 20 days of cuts, the “discount” on fuel given by the cut in excise duties expires. Given that the geopolitical situation remains unstable, a new intervention on fuels appears necessary.
That an extension would be necessary was not a mystery to anyone, but the choice to make the excise duty cut limited to a time window was due to the experience of 2022 and also to the search for resources. Second Il Sole 24 Orethe excise duty cut should be extended for another 23 days and thus reach April 30th.
Towards the extension of the excise duty cut
Without an extension, from 8 April the prices of petrol, diesel and LPG will skyrocket, easily exceeding 2.3 euros per litre. In fact, the cut in excise duties expires on April 7, which allowed a reduction in the price of 24.4 cents per litre. The initial objective was to keep the price, especially of diesel, within the threshold of 1.90 euros per litre, but geopolitical conditions did not allow this. The cut of 24.4 cents per liter was almost completely absorbed by price increases.
Since the beginning, the psychological threshold of 2 euros per liter has been exceeded several times, and by a lot. The measure therefore made it possible to save almost 0.25 euros on diesel and petrol and 0.12 euros on LPG, but in any case it did not manage to slow down the upward trend in fuel prices. The cost, above all, was high for the state coffers: 528 million euros in just 20 days. Extending it for another 23 days, so as to close the month of April with a sort of “discount” on fuel, could cost around another 500 million.
The plan could be precisely this, that is, to extend the cut for another 23 days and to make it find resources in funds such as the one for the Transition Plan 5.0. The Council of Ministers is expected on Friday 3 April, which will have to deal with the fuel decree and discussions with businesses. The fuel dossier and that of the so-called Transition 5.0 subsidies are therefore intertwined.
The cost of the fuel crisis: coverage is needed
For any intervention, coverage is needed, but in this case the continuation of the crisis could become unsustainable. Last March 18, it was decided to cut excise duties to avoid the increase of petrol, diesel and LPG above a certain threshold. Now a new decree is expected to extend the cut in excise duties, so as to make it come into force immediately after the expiry of the previous intervention.
However, the problem of resources remains, because extending the cut in excise duties would cost around another 500 million. The hypotheses point towards the 1.3 billion fund foreseen by the budget law for the Transition Plan 5.0, to which approximately 537 million euros have actually been allocated.
The energy crisis in the EU: 14 billion lost
The energy crisis is not only in Italy, even if it is among the countries most affected not only for fuels, but also for the indirect costs connected to them. The European Union has already paid 14 billion euros for the long crisis with gas prices increased by 70% and oil prices by 50%. So in addition to the Meloni government’s response to the continuation of the crisis, shared action between European countries is also expected.
However, the situation can be defined as “serious”, considering that the European Energy Commissioner Dan Jørgensen reminded member countries of the recommendations of the International Energy Agency to reduce demand, advising more responsible driving, the use of vehicles and smart working to avoid travel.
