The war in Ukraine resulted in a sharp increase in the price of petrol and diesel in Italy. The first, before recent cut in excise duties, she had come back a lot close to the levels recorded during the oil crises of the XNUMXs and one above those achieved in 2012, while the real price of diesel was at an all-time high. This is what we read in a recent one study by the Observatory of Italian public accounts directed by Carlo Cottarelli.
Gasoline prices: 'It affects the speed of the increase'
In detail, as far as petrol is concerned, “the speed of the price increase is striking, especially after the outbreak of war in Ukraine – reads the analysis – In 2012, the increase had been more gradual (around 3 percent in the peak months). In reverse, in March 2022 the acceleration was sharp: since February, prices have grown in real terms by 17 per cent, even if they began to fall from the middle of the month. That said, following the decisions of the executive, the final price decreased by 14 percent, thus returning to the values of January 2022".
The weight of taxation on the price of petrol
The study also shows that, net of taxes, petrol and diesel prices were at their highest levels in the last half century: compared to the previous peaks (particularly those of the 70s) the burden of taxation on petrol had decreased, while that of diesel had increased.
In particular, on the petrol front, “over time it has dropped in a particular way the weight of excise duties which in 1977 represented about 60 per cent of the final price, while last week it made up 34 percent of the total. Finally, with the application of the decree their weight will drop to 25 percent. This trend has more than compensated il higher level of the VAT rate compared to the 70s. In general, in the new millennium, the burden of taxes has been lower than the long-term average”.
A comparison between European countries
With the latest cut in excise duties of 25 cents per liter on fuels, the CPI Observatory continues, the increase in the price of their production and transport in the last month is reabsorbed.
In the European Union, before this cut, Italy had one of the highest pump fuel costs, mainly due to the high incidence of excise duties and VAT, but after the latest decree it has come closer to the European average.
“Il gasoline price in the third week of March, i.e. before the Government intervention, it was the third highest in Europe – continues the study – Italy was in any case in line with the major European economies, where the price remained around 2 euro/litre. However, the final price in Italy has remained much higher than the European Union average, which is attenuated by the lower price of Eastern European countries, where the pre-tax cost is lower. This is probably due to the fact that fuel distribution costs in Eastern European countries are lower than in the rest of Europe due to the lower wage level”.
Italy “was the second country after Holland for the value of indirect taxes for each liter of petrol e the third for tax levy per litre (after Holland and Finland) - concludes the study - With the intervention of the Government, the levy is considerably reduced, bringing the level of taxes below the European average (0,81 euro/litre in Italy against 0,85 in the EU). The new final price is in line with that of Spain and a little higher than the European average, but lower than other advanced economies in Europe”.
