What happens to the price of fuel from May 22nd? The new deadline for the cut in excise duties on petrol and diesel is approaching and, as already happened on 1 May, without an extension of the measure, prices will rise again. The question is how much they will rise or what the Executive’s next move will be.
A meeting of the Council of Ministers is scheduled for Friday 19 May at Palazzo Chigi and shortly before that a meeting will be held with road haulage companies, which will present their fuel-related requests, including aid through the tax credit and the deferral of tax and contribution payments to guarantee immediate liquidity.
Excise duty cut: petrol and diesel prices
Up to this moment it has been chosen to extend the measure of the excise duty cut, albeit with some differences starting from May 1st. In fact, the Meloni government extended the excise duty cut, but reduced its amount.
Compared to the first months of operation, the measure provided for a discount of 0.20 euros plus VAT on diesel and petrol, but with the latest renewal the cut in diesel fuel was confirmed, however lowering that relating to petrol, which went from 20 to five cents.
The current cost of petrol and diesel is still quite high, with the excise duty cut having kept the price down, but the discount has been completely canceled out by the price increase. Diesel remains around 2 euros per litre, while petrol has increased up to 1.90 euros per litre.
What will happen on May 22nd
From May 22nd the price of both could increase again. At the moment, in fact, the excise duty cut is scheduled until May 22nd, but without an extension prices will start to rise again.
The Minister of the Environment, Gilberto Pichetto Fratin, announced that “assessments are underway”. That the renewal of the excise duty cut is a certainty, however, is not at all a given, on the contrary.
We await the meeting on May 19th, preceded by the meeting with the road haulage companies, to find out what will happen at the petrol pump from May 23rd.
The coverage problem
The most complicated aspect concerns coverage: resources are needed to support an expense that is becoming increasingly more expensive. One of the problems would be the impossibility of using the mobile excise duty mechanism, which allows the VAT extra revenue deriving from the increase in prices to be exploited to reduce taxation on the same fuel. This is because the income for the month of May is only available in the second half of June and therefore it is impossible to use it immediately, therefore starting from May 23rd.
This is why the last measure was divided into two phases that used two different types of resources. In the case of a further extension of the measure, one could always think of using the double date while waiting for the data on the May extra revenue, but this means that the Executive will have to find alternative funds for the first part. In May, approximately 150 million euros were used, which were taken from the sanctions imposed by the Antitrust. Now the Ministry of Economy must find where to get the additional necessary resources.
Without the extension, however, the expense becomes burdensome especially for the pockets of Italians. With excise duties restored, diesel will return to growth by 24.4 cents, while petrol by 6.1 cents.
Consumers will therefore have to pay an estimated:
- petrol around 2 euros for self-service on the street;
- diesel around 2.20 euros for self-service on the street.
