The government is reconsidering the mechanism of mobile excise duties: how it works and how much it could reduce the price of petrol and diesel.
The surge in fuel prices continues, and the government is again evaluating one of the tools already provided for by Italian legislation to try to mitigate the effects of price increases at the pump: mobile excise duties. The issue was at the center of a meeting at Palazzo Chigi between Prime Minister Giorgia Meloni and Economy Minister Giancarlo Giorgetti, during which the general economic situation was examined with particular attention to the trend of petrol and diesel.
According to government sources, the executive is examining possible initiatives to adopt, including the possible activation of the mobile excise duty mechanism, while new meetings are already scheduled in the coming days.
Why petrol and diesel continue to rise
The price surge is closely linked to international tensions and, in particular, to the war in Iran, which has caused a strong rise in oil prices on international markets.
Although in recent hours Brent has recorded a slight decline, fluctuating between 96 and 97 dollars per barrel, while WTI has fallen below 90 dollars, the values remain clearly higher than before the conflict. Consequently, the effects continue to be felt at Italian filling stations.
According to the latest available data, today, July 24, the national average price in self-service mode has reached:
- 1.968 euros per liter for petrol (compared to 1.957 the previous day);
- 2.161 euros per liter for diesel (compared to 2.141 euros).
On the motorway network, prices are even higher:
- 2.059 euros per liter for petrol;
- 2.228 euros per liter for diesel.
These figures confirm a constant upward trend.
Consumers: "One euro more to fill up"
The National Consumers Union (UNC) highlights that, in just 24 hours, the price of diesel has increased by about 2 cents per liter. In practice, this means that a motorist who fills up has to spend about one euro more than the previous day, an increase that weighs heavily on those who use the car daily for work or long journeys.
What are mobile excise duties
Mobile excise duties represent an automatic system designed to limit the effects of oil price increases without directly burdening public finances. The mechanism was introduced by the Prodi government in 2008 and later modified by the Meloni government in 2023.
The principle is simple: when the price of crude oil increases, the VAT revenue also increases because the tax is calculated on a higher price. Part of this additional revenue can be used to temporarily reduce excise duties, thereby lowering the final price paid by motorists. In essence, the system is self-financing through the extra tax revenue generated by the oil price increase.
Why the mechanism may not be enough
Although cited as a possible solution, mobile excise duties have some limitations. The first concerns the size of the discount. According to various economic analyses, the reduction in the final price would be relatively modest, in the order of 7-10 cents per liter.
The second limitation concerns timing. The state must first collect the additional VAT revenue from the price increase and only then can it use it to lower excise duties. For this reason, the price moderation effect is not immediate.
From excise cuts to public finances
In the months following the outbreak of the conflict in Iran, the government had already intervened directly with a series of excise cuts.
The reduction was progressively adjusted: 20 cents per liter in the first phase; then 10 cents; finally 5 cents.
These interventions temporarily contained the cost of fuel but had a very heavy impact on public finances, with a cost of several billion euros. For this reason, an extension of that system is now considered hardly sustainable.
Europe reassures: no supply problems
On the international front, however, signs of relative calm are arriving. The European Oil Coordination Group, a body that brings together experts from the European Commission, member states, industry, the International Energy Agency, and NATO, states that there are currently no supply problems.
According to experts, European demand for oil and refined products can continue to be met thanks to commercial stocks and supplies from alternative markets.
The concern, however, concerns the medium term: if the conflict in the Middle East were to continue, tensions could intensify, with further repercussions on energy markets and, consequently, on pump prices.
The opposition: Schlein calls for immediate reactivation of mobile excise duties
The secretary of the Democratic Party, Elly Schlein, also intervened on the issue, accusing the government of not yet having intervened despite the continuous price increases. On the sidelines of the Festa dell'Unità in Aquileia, Schlein argued that the Council of Ministers had not taken any concrete decision on high fuel prices, reiterating the PD's proposal to reactivate the mobile excise duty mechanism, already put forward in recent months after the start of the war.
According to the Democratic leader, the increase in petrol and diesel prices is one of the most felt problems for Italian families, who already have to deal with the cost of shopping and the general increase in the cost of living.
The government's next moves
The executive continues to monitor the evolution of the oil market and pump prices. The decision on mobile excise duties has not yet been made, but the comparison between Palazzo Chigi and the Ministry of Economy will continue in the coming days.
Much will depend on the evolution of the international crisis and the trend of crude oil prices. If the rises continue, the government could decide to activate the automatic mechanism provided for by law, in an attempt to at least partially limit the weight of fuel prices on families and businesses.
