Excise duties and Giorgetti’s ‘maxitaglio’ with ‘juicio’

Today, the Minister for the Economy, Giancarlo Giorgetti, announced two measures to tackle the surge in fuel prices. On the one hand, the interministerial decree issued by the Ministry of Economy and Finance (MEF) and the Ministry of Economic Development (MASE) to activate the ‘variable excise duty’ (though to secure additional funding, we will have to wait until August, when the extra revenue from July becomes available); on the other hand, the Council of Ministers has approved a decree financing a further reduction by drawing on revenue from antitrust fines and the fund for structural economic policy measures. Overall, between excise duties and VAT, the cut will amount to around 17 cents per litre and will apply to diesel only. The cost is €125 million up to 6 August; however, a meeting of the Council of Ministers is already scheduled for the 4th to assess whether the measure should be extended. Giorgetti responded to La Staffetta Quotidiana, which asked whether this constitutes an environmentally harmful subsidy and, therefore, how it can be reconciled with the alignment of excise duties on diesel and petrol being pursued in accordance with the National Recovery and Resilience Plan (PNRR). The minister emphasised that the emergency situation caused by the wars in the Middle East and Ukraine is creating significant pressure, particularly on diesel: this has an economic impact, especially on industrialised countries such as Italy and Germany, and, according to Giorgetti, justifies this extraordinary intervention.

It must be acknowledged that the government is proceeding with great caution, bearing the public finance framework firmly in mind. However, 125 million – which may appear a modest sum – is in fact a tidy sum, considering that it is barely enough to last ten days. Furthermore, the protracted nature of the conflict and the prevailing uncertainty should perhaps prompt some self-critical reflection on the relief measures – which were at times excessive – granted between March and July, as well as on the succession of very short-term discounts which, in turn, create uncertainty and perverse incentives to bring forward or postpone payment in full. Let us hope that the international situation improves; if it does not, the government will have to proceed with even greater caution.