Fuel: the end of the discount – excise duties on diesel are once again the highest in Europe
As of this morning, excise duty on diesel has returned to 67.2 cents per litre, to which VAT must be added
by Lorenzo Pace
Key points
With the end of the ‘fuel discount’, Italian diesel taxes are once again the highest in the European Union. As of today, with the expiry of the 6.1-cent-per-litre cut on excise duty and VAT, standard taxation has been reinstated – a situation not seen since 18 March, when the Government intervened for the first time (at that time with a cut of 24.4 cents per litre) in response to rising prices caused by geopolitical tensions and soaring oil prices. Now that the price of Brent crude is hovering around 70 dollars a barrel – more than 30 per cent lower than the levels reached in the spring – the government has decided not to extend the reduction any further.
The European Commission’s surveys
As of this morning, therefore, excise duty on diesel has returned to 67.2 cents per litre. When VAT is added to the tax, the total tax burden exceeds one euro per litre, putting Italia back at the top of the European rankings for diesel taxation. This is according to the latest figures from the European Commission, which updates fuel prices every Thursday, distinguishing between the industrial component and the tax component. In the analysis of 2 July, whilst the discount was still in force, Italia was in second place behind Denmark by less than one cent per litre. With the tax relief now withdrawn, Italia automatically returns to the top of the rankings.
The manufacturer’s price is in line with the average
The data confirms that the difference compared with other European countries is due almost exclusively to tax policy and not to the industrial cost of fuel. Excluding excise duty and VAT, in fact, the price of diesel in Italia remains in line with that of the major European economies and far from the highest levels.
The petrol situation
The situation is similar for petrol, which has been subject to the same level of excise duty as diesel since last January, following the gradual realignment decided by the Government. With the return to full taxation, Italia has also climbed the petrol tax rankings, now sitting in sixth place amongst the countries with the highest tax burden. In this case, the Netherlands remains in first place, followed by Denmark, Finland, Greece and France. This picture confirms that, despite the fall in crude oil prices, tax continues to represent the heaviest component of the price paid by Italian motorists at the pump.
