Petrol, record prices. How much would it cost without excise and taxes? Ireland has already cut them

Skyrocketing fuel prices and protests that risk paralyzing entire production chains. While petrol exceeds 2 euros per liter due to international uncertainty over the Ukrainian crisis, fishermen and road hauliers cross their arms. Against expensive gasoline, but above all against excise duties, which inflate fuel prices and which make up almost the 60% of the cost for each refueling. But is it possible to cut them?

While the debate on the issue reopens in Italy, Ireland has moved on to the facts and on 8 March announced the cut of all taxes on fuel to help families cope with the rises, with savings that will range from 12 to 9 euros for each full tank. The savings will be 20 cents on the green and 15 on diesel with a maneuver that will cost the Irish tax authorities 320 million euros.

“Increase prices exceed 500 euros per family”

As of March 10, the diesel served exceeds 2.1 euros per liter and approaches 2 euros in the self-service version. The green has already broken through the 2 euro ceiling for a few days, reaching over 2.1 euro with service. LPG is also served at € 0.862 / liter. For the pockets of families, the increases translate into a sting of over 500 euros: exactly 525 euros more per year for those with petrol cars and 558 euros more in the case of diesel cars according to Assoutenti’s calculations. Today a liter of petrol costs on average 28% more than at the beginning of the year (21.9 euros more for a full tank) while 32.4% more is spent on diesel (with 23.2 euro more per refueling).

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From fishermen to truckers, workers cross their arms

But the increases do not only concern individuals and families. In Italy, the 90% of goods travel by road and with the increase in fuel costs – combined with the shortage of raw materials – there is a risk of blocking of production activities. Second Confindustria, which is pressing for tax exemption, the situation could generate a widespread crisis in various sectors, with over 400 million hours of layoffs. Under these conditions, profit margins are reduced so much that working is not worthwhile.

The first stop came from fishing boats of the Italian navy that will not go out to sea for the whole week, while i truck drivers they will stop on March 19th throughout Italy. And Unitras – Union of road haulage associations – does not exclude the possibility of spontaneous strikes because truck drivers “could ‘simply’ consider it more convenient to leave their vehicles on the aprons rather than continue traveling in these conditions”. Protest also the petrol station, which from Monday 14 March will remain in the dark: petrol and diesel increase but the revenue remains fixed, explain the distributors, who claim to earn about 3 cents and a half per liter. And while the liters dispensed fall due to rising prices, operating costs increase.

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Excise duties are 60% of the full amount: from the Vajont to the Friuli earthquake, what they finance

Tax exemption. This is the key word evoked by the protests as the only possible way to bring prices back to immediately tolerable levels. In the viewfinder there is VAT, which weighs 22% on the cost, and excise duties which, as Assoutenti recalls, weigh for almost 60% on every liter of gasoline sold in Italy and 55% on diesel (As notes the observatory on fuel prices of the MISE).

In Italy there are inflating the cost of fuel 19 excise duties, price increases that have been added to cope with various emergencies, many of which have now been overcome. Every time an Italian fills up, he continues to finance the war in Ethiopia, the Suez crisis, the post-Vajont reconstruction, the Save Italy of 2011 and the Fare decree of 2014. 0.01 is also paid for each liter of petrol. euro for the UN mission in Bosnia and 0.02 euro for the renewal of the contract for the 2004 autoferrotranvieri.

The government’s solution, the VAT cut is evaluated

Unhinging the complex system of excise duties is not easy, however, and the government hangs for one at least partial sterilization of VAT “The increase in fuel prices is a dramatic problem, we have already implemented many actions to reduce the impact of electricity prices on families, we will also address this issue to try to solve it” said Minister Giovannini.

The solution of the VAT cut, however, does not convince the National Consumers Union as declared by the president Massimiliano Dona “We are asking for a 30 cent reduction in excise duties and uncomplicated VAT sterilization mechanisms. The excise duties, which now weigh 72.84 cents on petrol and 61.74 cents for diesel, must be lowered to 42 cents for petrol and 31 cents for diesel, until the tensions on the international markets end ».

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About David Martin

David Martin is the lead editor for Spark Chronicles. David has been working as a freelance journalist.

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