The excise duty cut on diesel has been extended until August 25th. This is a decision that weighs approximately 245 million euros. Several ministries have had to cut and streamline programs, with the Ministry of Economy shifting resources towards cutting more than all the others.
However, the excise duty cut of 0.17 euros between the actual cut and VAT has a reduced impact on the distributor, between the increases which reduce the positive impact on the final price and the distributors who do not adjust prices on a regular basis. Thus diesel, although reduced in price, continues to exceed the psychological and wallet threshold of 2 euros per litre, even on ordinary roads and in self-service mode.
Excise duty cut on diesel by 17 cents
The government has extended the excise duty cut until August 25. This is a cut of 0.17 euros which was necessary to mitigate the increase in costs to distributors.
However, the effects of the cut are limited. In fact, diesel can reach peaks of over 2 euros per liter on ordinary roads, not to mention the much higher figures on motorways and for the refueling service offered.
According to Codacons, the effective discount, net of the increases given by the conflict between the United States and Iran, is just 8 cents.
And this is only for diesel, while nothing changes for petrol. In fact, the government has not intervened on the cost of petrol. For Codacons, these are over 17 million citizens who do not enjoy any benefits.
Cheapest diesel: the price
Diesel at distributors will therefore not drop by 0.17 euros (0.14 euros excise duty and three cents VAT). The excise duty cut is absorbed by the increases and the real reduction in cost is just about ten cents. A fact that also emerges due to the checks by the Financial Police, which highlight how many distributors have not adjusted their prices.
At the moment the price on the ordinary road is 2.092 euros per litre, while on the motorway in self-service mode it stands at around 2.166 euros per litre. This is a price drop compared to August 7, when it was around 2,097 euros per liter on the road and 2,170 euros per liter on the motorway.
Be careful of distributors who resell fuel at a price that’s too low to be true. In fact, there are increasing cases of cars and scooters stopping due to blocked engines due to dirty mixtures.
Where does the money come from?
So far, since the start of the crisis in the Middle East, the government has spent around 1.8 billion euros to mitigate the rising cost of diesel and petrol. The new measure alone has an economic impact of approximately 245 million euros.
While waiting for the data on the collections due to the VAT extra revenue, other ways were hypothesized to recover the necessary resources, such as increasing taxes on other goods. Mostly targeted were cigarettes or alcohol.
However, this hypothesis was discarded because it was not appreciated by consumer associations. Codacons himself declared:
The idea of financing the excise duty cut by increasing cigarette prices would have been madness.
How much each ministry has cut
The money for the cut comes from sacrifices asked nine ministries and spending programs.
These are:
- Ministry of Economy with 60 million euros;
- Ministry of the Interior with 8.07 million euros (3.16 million euros cut to public order and 3.47 million euros to immigration, reception and guarantee of rights);
- Ministry of Infrastructure and Transport, cut of 7 million euros (around 5.7 to the right to mobility and the development of transport systems);
- Ministry of the Environment and Energy Security, cut of 7 million euros (6.55 million from the promotion of energy efficiency, renewable energy and regulation of the energy market);
- Ministry of Foreign Affairs, cut of 5 million euros (from development cooperation programs for 2.3 million and from support for the internationalization of companies and promotion of Made in Italy for 1.88 million);
- Ministry of Culture, cut of 3.5 million (1.27 from the protection and valorisation of book assets, promotion and support of books and publishing);
- Ministry of Education cut by 3 million;
- Ministry of Health 1 million euro cut;
- Ministry of Justice cut of 1 million euros.
Waivers also for special funds and programs:
- the Economy will cut 65 million euros;
- Businesses and Made in Italy cut 14.5 million euros;
- Labor and Social Policies cuts 11.6 million euros;
- University and Research cuts 9.8 million euros;
- Agriculture cuts 5.5 million euros;
- Tourism cuts 5 million euros;
- Health cuts 10 million euros.
