How will excise taxes affect oil and gasoline? - The Italian government's decision aims to support public transportation
Excise is a “reordering and not an increase”, as more than one representative of the Italian government, which finalized the legislative decree on this issue, wanted to underline. The decision received final approval in the Council of Ministers. The fact is that excise duties are “reordered”, but revenues are increasing.
This is confirmed by the provision itself, which expressly assigns "the increased resources deriving from changes in tariffs" to the national public transport fund and to the delegation fund. In the first case, the new funds will be used to close the contract renewal of bus, tram and rail operators, blocked for months precisely because of the obstacle of resources considered insufficient by the sector's unions. This is well known to anyone in Italian cities, which had to face numerous strikes this winter.
As for the second quota, instead, those who drive a diesel car and will see their bill increase can consider the additional cost as a kind of prepayment of the tax benefits expected in the next stages of the implementation of the reform. But for the moment this is a blind bet, because it will be necessary to see the audience and the specific weight of the new measures, called to make their way into a public accounts framework, which is becoming more and more uncertain every day due to trade wars and international unknowns.
However, the most obvious is the bill for those who request diesel at the distributor and vice versa, the discount compared to today for those who drive gasoline cars. But how will this be achieved?
First point: the mechanism described in the decree foresees an increase in excise duties on diesel and an equivalent reduction in those applied to gasoline. Today, the excise duty on gasoline is 72.8 cents per liter, that on diesel is 61.7 cents. The gap is 11.1 cents, so half should be at 67.25 cents, with an increase of 5.55 cents on diesel and an equivalent reduction on gasoline. To achieve the goal, it will take five years from now, with an annual increase of between 1 and 1.5 cents.
Second point: the increase in oil and the decrease in gasoline are equivalent, but oil is sold much more than gasoline. In 2024, almost 28.8 billion liters of oil and 12.3 billion liters of gasoline were purchased.
With last year's consumption, each adjustment of one cent is worth about 165 million per year, which is the balance between 288 million more paid for oil and 123 less paid for gasoline. At the end of the extension, 1.1 billion in additional income is reached, which is the difference between 1.93 billion more for oil and 830 million less received from gasoline. However, oil used in agriculture and biofuels will be deducted from the account, which will maintain the reduced rate. The contract of bus, rail and tram drivers, with a request of 500 million euros, is intended to use about half of the new income.
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