Sanctions effect, further increases for diesel are expected. The excise issue is destined to recur again and already in February

For diesel, the worst is probably yet to come. And the problem of excise duties is destined to become more heated than it already is now. Unlike petrol, which is mostly used by cars, diesel is the fuel “that moves the world”. Besides cars it powers trucks, industrial and agricultural machines as well as other means of transport. Starting in February the Western embargo against Russia it will extend to refined petroleum products among which the main one is, in fact, diesel, of which Moscow was and remains one big exporter. The embargo will make it more difficult to get Russian diesel to Europe and Italy without drying up the flows. It is likely, as is already happening to some extent now, that Russian oil being sent to countries like India and here refined to ship then “cleaned” diesel fuel on western marketswith a consequent increase in costs. We will probably also resort to more borderline practices such as that of mix diesel from various sources in areas outside the EU (system already used in recent months by some tankers) to hide the Russian component. Moscow can also count on a fleet of “ghost ships”, whose ownership is not attributable to Russia and which could be used to circumvent the embargo. The fact is that, according to what the agency writes Bloomberg, the European Union will have to somehow replace approx 600 thousand barrels per day of diesel imported from Russia. The embargo won’t be painless for the Kremlin, though the estimates of the effects are rather uncertain. Some analysts calculate that Moscow will have to redirect up to two-thirds of its diesel exports.

However, it is also the companies that have to find alternative supplies European refineries, German species, which until now relied largely on Russian supplies. The embargo also falls on a sector been under pressure for some time also due to the decline in investment. Policies and funding push everyone towards the development of renewables and this causes producers to be reluctant to engage in the development of new refining capacity. Other unknowns are the price of the raw material, oil, also linked to the prospects for global economic growth which determine its demand. In the last two and a half months the cost of crude oil fell 15% going from just under 100 to 85 dollars a barrel. This descent has translated on the industrial component of the cost of petrol and diesel, which in turn decreased (although the benefit for motorists was totally nullified by the flood reintroduction of excise duties decided by the Meloni government). However only last July a barrel was trading at almost $110 and, especially if the economic slowdown turns out to be less marked than expected, it is not impossible for prices to start rising again. In an interview given to Corriere della Sera the president of Nomisma energia (study center not far from the oil industry, ndr) Davide Tabarelli stated that “The prices of fuels today they are very low; I don’t dare to think what could happen when the oil price goes up, I’m scared. I expected reached 2.6 euros per litre. Instead, the price of crude oil is still low and therefore the increases without the cut in excise duties have been mitigated”.