Let’s leave aside the government short-circuit on the increase in fuel prices and on the presumed culprits that would be the petrol stations. Fuel has increased because the excise duties that Draghi had decreased and which this government had confirmed in the first months of its work have increased again. Now he has decided to restore them to pre-crisis levels.
Let’s see what they are.
The price of fuel is actually determined by three factors:
1) Industrial price. It is obtained from the quotation of the raw material to which the costs of refining and transport are added.
2) Excise. These are fixed amount taxes, not calculated as a percentage, on petrol and diesel. They were born as a purpose tax, that is to finance certain projects. The most striking, always mentioned, was the financing of the Ethiopian War of 1935. They were then justified to repair the damage caused by the Vajont or the Suez crisis, but since 1995 there has been an overall reorganization. Since then this tax has been indicated in a uniform way. Therefore, it is no longer a purpose tax, but a structural component of the price. In total, on a liter of petrol today they represent 0.7284 Euros or 40% of the price of these days and on a liter of diesel they represent 0.6174 Euros or 33% of the price.
3) I.V.A. The value added tax is, in practice, a tax on a tax, because it is calculated on the sum of the industrial price and excise duties, which are already a tax. According to the latest monitoring by the Ministry of the Environment and Energy Security, VAT and excise duties amount to 58.2% of the price of petrol and 51.1% of that of diesel. The latter, despite having a lower tax rate, increased due to the rise in industrial prices.
Compared to other European countries, Italy’s fuel taxation is the highest. According to the energy company ACEA, in Europe only the Netherlands has higher taxes on petrol, but lower on diesel. Some say that excise duties have a disincentive effect on the use of a polluting product, but it should be noted that in many cases citizens are forced to use their own cars due to the lack or inefficiency of public transport services. It is very difficult for governments not to give in to the temptation to maintain this highly profitable tax, which does not only concern fuel. In 2021, the State collected around 33 billion euros with excise duties on fuel, alcohol and tobacco. Of these, 25 billion are derived from petrol and diesel.
