A mayor in Abruzzo ‘nationalises’ a petrol station and inspires Fratoianni: ‘Energy and water must return to public control’

To tackle high fuel prices, the broad coalition is taking action. Whilst Elly Schlein (alongside Economy Minister Giorgetti) is pushing to tax the windfall profits of energy companies, the leader of the Green-Left Alliance, Nicola Fratoianni, is calling loudly for renationalisation. “It is time to reconsider a return to public control of all the country’s infrastructure networks and strategic services,” he wrote in a post, in which he draws on a local news story that has been the subject of much discussion in recent hours to promote his idea. In Valle Castellana, a mountain village of 800 inhabitants in the province of Teramo, the village’s only petrol station is run directly by the local council, which for the past four years has been selling petrol and diesel at almost cost price. Essentially, the council buys the fuel and then resells it without adding any profit margin, resulting in savings at the pump of between 10 and 20 centesimi per litre compared with a standard self-service station.

However, this move has nothing to do with high fuel prices. As Mayor Camillo D’Angelo himself explained, following the 2016 earthquake and the depopulation of inland areas, that petrol station was no longer economically viable and was on the verge of closing. The risk, therefore, was losing a refuelling point that was essential for the entire area. “It all started out of a real need, and has now become an opportunity, so much so that several municipalities, such as Castelli – also in the province of Teramo – have asked us how to set the process in motion to follow our example,” explained the mayor. The story, hailed by the press and on social media as “a success”, has caught the attention of national politicians. So much so that, for Fratoianni, a local story could now even justify a strategy to be applied throughout Italy. "This is how you bring prices down. Simple, isn’t it?" wrote the leader of AVS. "If private sector prices are too high, the public sector steps in, takes control and can charge lower prices because it doesn’t have to make a profit. Perhaps some die-hard free-market enthusiasts might have been left speechless, but for us there’s nothing surprising about it.” Hence the nostalgia for the pre-privatisation era: “Public control of essential goods and services has been a cornerstone of Italy for decades,” the post reads. “Then came the frenzy of privatisations, the belief that everything could be solved by the free market. We believe it is time to reverse course.” The plan, therefore, is to regain control of the country’s strategic services “starting with water and energy. It works, and it is the right thing to do.” 

Fratoianni’s proposal could – why not? – also be incorporated into the broad coalition’s programme. The ‘like’ on the post by Virginia Libero, leader of the Young Democrats (who commemorated Fidel Castro a few days ago), suggests that the PD’s youth wing is not averse to the proposal. It is certainly among the most popular proposals on “Decidiamo!”, the AVS platform that collects members’ initiatives and proposals. Among these, in fact, the proposal for a “genuine socialist programme” stands out, complete with the “nationalisation of banks, insurance companies and large industrial groups”, as well as companies in the energy and infrastructure sectors. Fratoianni is putting forward similar ideas, though it is a pity that he is doing so on the wrong premise. Interviewed by "Quotidiano Nazionale", the economist and Luiss lecturer Alessandro Lanza, a director of the Eni ‘Enrico Mattei’ Foundation, immediately played down the Valle Castellana case as a “natural monopoly in an isolated mountainous area”. An experiment, therefore, that is entirely local in scope and unsustainable on a large scale, given that in larger towns with more private operators, “a municipal facility operating at cost price risks creating a situation of unfair competition” and related legal disputes.

Furthermore, the costs of acquiring and managing a single petrol station would not be comparable to those of an entire energy infrastructure network. Suffice it to say that, to bring the fifteen listed companies in which the Ministry of Economy and Finance (MEF) holds a stake (including those dealing with strategic networks and services) under 100 per cent public ownership, the state would end up spending more than 261 billion euros (this figure is obtained by subtracting the share already held by the state from the companies’ market capitalisation). And it matters little whether the privatisation process has led to increased efficiency and corporate profitability, whilst also helping to boost the market capitalisation of the Italian Stock Exchange and the inflow of foreign capital. Nor does it matter that privatisation has been a sound financial move for the state budget. As we explain here, in fact, in 1991 state-owned enterprises had 810 lire of debt for every 100 lire of turnover. For private companies, the ratio was 270 lire. From 1980 to 1994, the net debt amounted to 120,680 billion lire, or around 62 billion euros. From 1992 onwards, 93 companies were sold off in whole or in part, raising 190 billion euros, and the Treasury directly carried out privatisation transactions worth around 66.6 billion euros. Well, none of that matters, because for Fratoianni “that’s how you bring prices down”: by going backwards. “Simple, isn’t it?”