High fuel prices: diesel hits a record high of over 2.1 euros in Italia

On the motorway, petrol prices have also exceeded the 2-euro-per-litre mark (yesterday’s average price was 2.02, again at self-service stations), whilst diesel reached 2.155 euros.

In short, the fever has returned at the petrol stations. And even though the political week was dominated first by the electoral law and then by the Roggero case, the figures displayed on the petrol station price boards look set to spark debate once again very soon. Antonio Misiani, the PD’s economic spokesperson, already spoke out on the matter yesterday, calling for the swift reactivation of the ‘floating excise duty’ mechanism, which uses the extra VAT revenue generated by price rises to reduce the tax burden at the pump.

For the time being, the Government is taking a cautious approach. Last Wednesday, just a few hours after the Mimit monitoring system had confirmed that diesel prices had risen above the symbolic threshold of 2 euros per litre (Sole 24 Ore, 16 July), when asked about the matter, the Minister for the Economy, Giancarlo Giorgetti, explained that ‘if we were to take action again, we would do so without interrupting the process of fiscal consolidation, and with the flexibility secured at European level’. So far, through variable excise duties and other measures, the government has allocated almost two billion euros to ease the burden of prices between 18 March and 3 July. And a return to that path is far from a foregone conclusion.

First and foremost, the cut in excise duties has regressive effects, in the sense that it benefits those with more money in their pockets – and therefore greater ability to consume – the most. Now, the passage of time presents some additional difficulties: because variable excise duties, on their own, have only a minimal impact, and to reinforce them, further funding would need to be found through a decree-law.

The energy safeguard clause, secured in Brussels following lengthy negotiations, cannot be used to cut excise duties and would require a budgetary deviation: which must be approved by an absolute majority of the members of both Houses, and which the Ministry of the Economy would like to avoid before the country exits the EU’s excessive deficit procedure, which is currently contingent on the 2025 deficit pending new ISTAT calculations on 22 September.

Taken together, these factors therefore seem to be working against a return to the recent past. But during the holiday month, fuel prices heading towards record highs could prove problematic – especially now that the general election campaign has already completely taken over the parties’ agendas.