Fuel price rise makes Italians cut consumption
Thu Sep 20, 2012 3:17AM
Skyrocketing prices at the pumps, also due to higher taxes, are forcing Italians to slash their consumption of petrol and diesel. The government is considering adopting a reduction in excise taxes in an attempt to to cut fuel costs.A study by Centro Studi Promotor - a research centre specialized in automobile market - has revealed that despite cutting their consumption of fuel by over nine per cent between January and August this year, Italians are still paying much more than in the same period of 2011. According to the research center this phenomena is partly due to rising fuel prices that went up by an average of 9.5 per cent for petrol and 8.4 per cent for diesel in the first eight months of 2012. Petrol price has reached 2 euros per liter while the price of diesel is about 1.8 euros. The Italian government boosted taxes on auto fuel by an average of 22.4 per cent on petrol and 33 per cent on diesel in the period January to August this year meaning that Italians' spending on fuel rose by almost 3.4 billion euros in the same period. According to automobile market experts the latest crude oil price increases on the international market might persuade the government to cut petrol price to ease financial burdens of Italian drivers. Consumers’ and employers' associations and political parties are supporting the enforcement of the so-called sterilization of VAT tax. This measure implies a reduction of excise taxes to compensate the increase of VAT tax, as a consequence of the crude oil price growth. According to the 2008 fuel price law the reduction of excise taxes on gas can be put into effect only when the oil international quotations rise by 2 per cent more in comparison with the previous quarter. It seems that, for now, there are no such conditions in Italy, so it is hard to predict whether the technocratic government led by Mario Monti will avail itself of the 2008 rule.