A price cap is sensible if imposed by the private sector, but not if imposed by the state. The Eni case

Eni has decided to lower fuel prices (€2.19 for diesel, €1.99 for petrol), with effect from 28 September, for a period of 30 days. This is a market-driven move, which may prompt other companies, for competitive reasons, to follow suit. This is an interesting move, which complements and enhances the effectiveness of the measures adopted by the government, which, unlike Eni’s, have an impact on the state budget. Last April, Argentina’s state-owned oil company, YPF, carried out a similar initiative to cap fuel prices in the South American country, initially for 45 days and subsequently extended, in the belief that it would recoup the cost of the operation at a later date.

Operating in line with market principles is far more effective than merely trying to keep pace with rising costs through measures funded solely by the state, which is why the decision by the state-owned energy company is particularly significant. Eni can afford to do this partly because of the success it has achieved in securing supplies from various parts of the world, thanks in part to the support it has always enjoyed from governments, regardless of their political persuasion. Combating the rise in transport costs – which is then reflected in the prices of the goods transported, with inflationary effects – is essential to avoid a vicious circle of inflation and stunted growth, which is the scenario that would otherwise inevitably unfold.

The global bottleneck in refining, caused in part by armed conflicts, can be managed fairly well by a company that has modern refineries located in various countries. Of course, this is not enough to halt a rise in prices driven by international factors that Italy is unable to counter. However, giving motorists and hauliers some breathing space during a particularly critical phase is a sign of the national economy’s strength and resilience that should not be overlooked.