The fuel of populism

“You can’t pay with slogans at the petrol pump,” said Antonio Misiani, the Democratic Party’s economic spokesperson. These are words worth agreeing with, but he would do well to repeat them to his own party. The PD, in fact, is calling for “the immediate reactivation of the floating excise duty mechanism, to reduce petrol and diesel prices at the pump straight away”. Fuel prices have returned to high levels following the end of the temporary excise duty relief measures, which, between late March and early July, drained around 1.5 billion euros from the public budget. According to Monday’s figures, petrol cost 1.91 euros per litre, whilst diesel cost 2.04 euros per litre. This is no small amount, but these figures are far from the peaks seen in April (when excise duties were 20 cents lower) and even further from the record high of July 2022 (when both fuels, despite a reduced excise duty regime being in place at the time, were close to 2.2 euros per litre).

Adjusting taxes would deprive the Treasury of valuable resources without generating any measurable benefit, as the amount involved is just a few pennies per person. Funded by the VAT windfall, the variable excise duty amounts to a mere 2.2 cents for every 10-point increase above the reference values. Furthermore, a few days ago the Ministry for the Environment published the Catalogue of Environmentally Harmful Subsidies (SAD), which shows a reduction for the first time precisely thanks to the alignment of excise duties (which has been heavily criticised by the broad coalition). The Nazareno, moreover, is calling for “the presentation of a plan for the use of resources linked to the budgetary flexibility permitted by the European Union to tackle the energy crisis”. The Commission has been crystal clear from the outset: these funds cannot be used to cut excise duties but must be used to finance green investments. Elly Schlein should explain whether she believes the priority is decarbonisation – and thus facilitating the phase-out of fossil fuels – or populism. In that case, she can continue to repeat those very same election slogans that even the right – with the exception of Vannacci – has now cast aside, and which not only fail to win votes but are also unsuitable for governing.