Diesel: the excise duty cut is back on the table. Flexibility under discussion at Ecofin
The government is working on reinstating the discount on diesel. An EU official has ruled out Italy’s request for flexibility during the talks in Luxembourg. The Ministry of the Economy responds: “It will be discussed.”
The decision to put an end to the long series of extensions to the fuel duty cuts lasted less than 24 hours. The change of heart took shape from the early afternoon yesterday. Barring any surprises, this will shortly result in the publication of a new interministerial decree to reinstate the ‘variable excise duties’. These are set to be slightly higher than on previous occasions, as motorists faced higher prices in September.
Variable excise duties
It was the predictable side effect of the expiry of the old discount that quickly reignited work on the measure. This has also pushed up the price cap – introduced in recent days by Eni, closely followed by IP and Q8 – by 6 cents; a list that in the last few hours has also come to include Esso and Tamoil petrol stations.
In economic terms, the change is not huge. But on the political front, it is enough to spark controversy over a price cap on which the Government has placed great emphasis, precisely to ease the burden of measures on the public budget. On the subject of variable excise duties, “we are working on it”, explained Deputy Minister for the Economy Maurizio Leo as early as this afternoon, and Pichetto Fratin took a similar line, whilst from the broader coalition, M5S leader Giuseppe Conte spoke of a “price cap that lasted as long as a cat on the ring road” and the leader of the PD senators, Francesco Boccia, thundered against ‘the failure of Giorgetti and Meloni’.
The European match
More significant, at least in the long term, is the European issue, over which, however, tensions were once again flaring up at the very same time – fuelled, as in recent days, by a series of statements from officials, which were subsequently corrected yesterday by diplomatic sources.
There are two key issues at the heart of the negotiations with the EU, ahead of tomorrow’s Eurogroup meeting and Friday’s Ecofin meeting in Luxembourg: an EU tax on windfall profits, called for by Italy alongside Germany, Austria, Spain, Portugal and Poland, and ‘flexibility’ regarding assessments of compliance with the spending ceilings imposed by the new Stability Pact, requested by Rome alongside Greece but also being discussed in recent days with other countries.
