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The government extends until August 25th the 17 cents per liter cut in diesel taxes, in force since July 28th. The current discount expires on August 6, and the Council of Ministers decided in the afternoon to extend it by 19 days, to at least cover the summer exodus. The necessary funds, around 245 million, will be found not only through mobile excise duties, i.e. with the reduction of the fuel tax (excise duties) financed by the increase in VAT on the fuels themselves, but also with some cuts in ministerial expenses. Prime Minister Giorgia Meloni met before the government meeting with Deputy Prime Ministers Antonio Tajani and Matteo Salvini and with the Minister of Economy, Giancarlo Giorgetti, to discuss the extension of the tax cut (14 cents of excise duty and 3 cents of VAT on fuel). Politically it was too dangerous to let the discount expire right at the beginning of the August exodus, with the risk of fierce protests from citizens and consumer associations. But since March the government has already spent over 2 billion euros to control fuel prices, raking in money from all sides: VAT increases on fuel, Antitrust fines on energy companies, the Economic Development Fund and more. The barrel has been scraped to the bottom, and with Italy’s stellar debt, there is no room for finding more money in the folds of the budget. However, the government found the funds anyway, resorting to so-called mobile excise duties and cuts to some ministries (“they were not very happy”, commented Giorgetti). A measure invented by the Prodi government in 2008 and then reformed by Meloni in 2023. In practice, the cut in excise duties is financed by the increase in VAT on the fuels themselves, due to the increase in their price. It is not an immediate cut, because we have to wait to know how much VAT it was collected the previous month. And it is not even a large cut. However, the mobile excise tax is a self-sustaining measure, and does not affect the state budget (even if it causes a significant lack of tax revenue).
This afternoon, Deputy Prime Minister Matteo Salvini had denied the circulating hypothesis of financing the excise duty cut with new taxes on cigarettes or alcohol: «Reducing diesel fuel by 20 cents to tax cigarettes and alcohol doesn’t seem like it’s going anywhere – he said -. I give you with my right hand and I take you with my left hand.” It remains to be seen what concrete effect this extension of the cut decided today will have. The 17 cents per liter discount on July 28 had little effect at the pump. Diesel today was at 2,097 euros per liter on ordinary roads, petrol at 1,999 euros. The increase in oil and refined product prices, due to the rekindling of the conflict between the USA and Iran, ate up almost all of the reduction. In the end, Codacons calculated, the effective discount was reduced to just over 8 cents, and only on diesel. The opposition and consumer associations have been shooting for days at the price caps decided by the government and extended today, branding it as insufficient. On the other hand, there is no money to lower prices, and the war between the USA and Iran shows no signs of stopping. But the executive couldn’t do nothing either, with Italians leaving for summer holidays (mostly by car) and the risk of seeing products in supermarkets increase further due to the increase in transport costs. For Francesco Boccia of the Democratic Party, «the executive lives from day to day, chasing deadlines without addressing the structural causes of the crisis. It limits itself to extending temporary measures which do not really affect the cost of fuel and do not give any certainty to families and businesses.” «On the high cost of fuel, the Government reiterates the mistake of ten days ago – comments Chiara Appendino of the Five Star Movement – Discount only on diesel and zero answers for millions of citizens who drive petrol cars and which for this majority simply do not exist. In fact, today a photocopy of an already failed decree arrives.”
Meloni: “We know that there are challenges that cannot be solved in a day”
“Today the Council of Ministers approved several important measures. Among these, we have extended – we read in a note from Prime Minister Meloni published on social media – until 25 August the measures against high fuel prices. We are trying to do our part to contain the effects of the price increases, in a still very complex international phase. From 25 August the mobile excise duty mechanism will come into force again, which we will continue to monitor carefully to evaluate any further intervention.
Furthermore, we have strengthened interventions for the Campi Flegrei, with new resources and measures to support the families affected, to make the buildings safe and to help the Municipalities manage a situation that continues to require the utmost attention.
We have also authorized permanent hiring for the next school year: 46,642 teachers, of which 10,810 support teachers, as well as school managers, educational staff, religion teachers and ATA staff. An important investment that will bring almost 11,000 new support teachers to our schools, to ensure greater teaching continuity, strengthen inclusion and ensure students with disabilities get the support they deserve.
We know that there are challenges that cannot be solved in a day. For this reason we will continue to follow all these situations with responsibility, ready to intervene whenever necessary.”
Giorgetti: “Extension of excise duties worth 245 million, cuts to ministries”
“We cut some expenses at the ministries, they weren’t very happy, but then we’ll see.” Economy Minister Giancarlo Giorgetti said this when entering the informal meeting with the bureau of the Chamber and Senate to those who asked him about coverage for the extension of the cut in excise duties on diesel. In total, he specified, the measure is worth “245 million”.