At the beginning of the year the Government, to replace the failure to confirm the excise duty cut of ‘Draghi’ memory, decided to mitigate the expensive fuel forcing distributors to display the regional average price (or national on the motorway) next to the prices actually charged. A measure in the name of transparency, applied starting from 1 August 2023, which in the intentions of the Executive should have put an end to the alleged speculation by some petrol station attendantsand at the same time direct motorists towards the cheaper pumps. Well, almost two months after the start of the measure we can safely say that these intentions have not been fulfilled not achieved at all. Indeed, it is possible that the obligation to display the average price has obtained theopposite effect, contributing (along with other factors) to increasing petrol and diesel prices. To the point that the Government is thinking of a further remedy to control prices.
FUEL PRICES INCREASE IN ONE YEAR
For Minister Urso, owner of Mimit, the blame is on expensive fuel is to be attributed mostly to the production cut decided by the OPEC countries, which has caused production to rise in the last two months crude oil prices. This is certainly having a significant impact, however a year ago at this time the price of oil was at levels close to the current ones and despite this the average price of petrol stood at around 1.6-1.7 €/lagainst €1.99/l of the latest reading (but in reality in many regions they have significantly exceeded €2/l). It is true that in September last year the excise duty cut was still in force, but even by eliminating the 18 cent discount, the average price of petrol was decidedly lower than today’s values.
HAS THE OBLIGATION TO DISPLAY AVERAGE PRICES CAUSE RATES TO RAISE?
So there’s something else that made me squirt prices upwards. And the economic daily Milano Finanza believes it has identified the person responsible precisely in the rule it has had since the beginning of August obliged distributors to display the average price of fuel. “The obligation imposed on merchants to display signs with the average regional price has also induced the cheapest distributors to do so align the cost of petrol and diesel upwards”, writes the newspaper, “In August every week the average price increased a little and the distributors also became a little more expensive. Thus, week after week, we have witnessed a continuous growth in average prices and prices charged, with increasingly small differences between distributors. And without any reflection in the moments of downward oscillation, which have also existed since the beginning of last month”.
Various consumer associations have also underlined the obligation to display the average price of fuel it had the opposite effect compared to the Government’s intentions, a hypothesis also supported by Fegica (Federation of Fuel Plant Managers), according to which the simple debut of the cartels with average prices had immediately caused the price of diesel to rise by €0.041/l on the ordinary network and by €0.036 on the motorway network . “It seems completely obvious”, concluded MF, “that the obligation to display average prices was automatically interpreted by petrol station attendants as a suggestion to raise prices to align with the average, triggering a spiral of meaningless increases. It didn’t take a Nobel Prize to understand what the effect of such a move would be. An averagely prepared statistics student was enough”.
FUEL: PETROL AND DIESEL PRICES COMPARISON BETWEEN 1ST AUGUST AND TODAY
Precisely thanks to the daily publication of the average prices on the Mimit website (the same ones that are then displayed to the distributors) we were able to do the comparison between regional petrol and diesel rates of August 1stwhen the obligation started, and those of today19 September 2023. The increases are evident, here are some examples (the values are €/l):
Self diesel: from 1.758 to 1.933
Self-service petrol: from 1.912 to 2.004
- Emilia Romagna
Self diesel: from 1.768 to 1.941
Self-service petrol: from 1,911 to 2,000
Self diesel: from 1.757 to 1.929
Self-service petrol: from 1,902 to 1,998
Self diesel: from 1.774 to 1.944
Self-service petrol: from 1.911 to 2.001
Self diesel: from 1,773 to 1,940
Self-service petrol: from 1.911 to 2.001
Self diesel: from 1.774 to 1.931
Self-service petrol: from 1.923 to 2.001
Self diesel: from 1.753 to 1.921
Self-service petrol: from 1,898 to 1,983.
- Motorway network (national average)
Self diesel: from 1.854 to 2.022
Self-service petrol: from 1.984 to 2.078.
We’ll see if in the next few weeks the Government will backtrack on the average prices displayedhaving noted its probable occurrence uselessness (not to mention harmfulness). And what concrete measures will he be able to introduce, after having firmly ruled out wanting to resort to cutting excise duties, however alleviate the phenomenon of high petrol prices which weighs on millions of Italian families.