Sunday, June 6

The cost of gas in Italy

While I'm transfixed by the sheer impotence & incompetence of man as the oil continues to gush into the gulf of Mexico, my thoughts turn to the out-of-pocket costs of running my car.  The oil companies look at any blip on the geo-political horizon to increase prices, combined with the drop in the Euro, well, we're looking at an expensive summer in arrivo.

In Italy, everyone is hyper-ventilating over the fact that while the price of crude went down by something like 35%, the prices at the pump only declined by 1.3%.  Coupled with the fact that 62.5% of that price is all taxes, I thought I'd see what was going on (to the best of my internet ability).  For the record, those taxes are fairly average with the rest of Europe.

Italians love to quip that in the cost of our gas we are paying for 1. the actual cost 2. sales tax (the IVA value added tax, which means 16.7% tax on every step of the way from Russia to Ukraine to Europe to the pump), and 3. the spurious 'accise' tax - which is a conglomerate of war chest funds starting with Mussolini's war in Abissinia (1935), the Suez Canal crisis (1956), the Vajont disaster (1966), the flooding of Florence (1966), various earthquakes, and missions in Lebanon (1983) & Bosnia (1996). It would appear missing Afghanistan and Aquila's earthquake, but they're probably in there today.

While it's not really true that we're still paying for Mussolini's Ethiopian wars (I should hope that by now, even with interest, that's over & donewith), the point is, the tax was added, and then, war over, not taken away.  Just like the Monte Bianco tunnel or the airlines' petrol charges -- funny how that happens - the cost of going thru that tunnel and you could have been sitting on a beach in Sardinia instead.
Thus the high cost of petroleum in Italy (I'm not sure which taxes other European countries are levying on their own petrol but I do know, it does zippo to limit car usage.

So, here's the breakdown, according to the Sole24 ore newspaper:

62,5% = 45,8% accisa (war funds) and 16,7% IVA (value added tax)
The leftover 37,5% is the so-called industrial tax (upon which everyone has also paid IVA)
made up of 26,5% crude, 1% transport charges, 4% margins for gas station and 6% margin for petrol companies.

And, as long as I'm dissing urban legends, Italians also love to quip that America's low prices are because we have oil (now lots & lots in the gulf), and they don't.  That's not entirely true.  Landlocked Germany doesn't have oil, Spain doesn't have oil, and yet the prices are lower than in Italy.  It's the taxes, stupid.


Dave514 said...

I'm going to post to you privately about my family's connection Il Duce's conquering of Ethiopia Somalia and Eritrea and the duke D'Aosta.


cuz liz said...

According to a few articles I saw, it seems demand in Italy is down so much that they are looking at closing 5 of their refineries. So, they gotta keep the profits coming in somehow.

Irreverent Italy said...

I would bet your bottom euro that those 'closings' are due to the fact that this govt wants nuclear plants instead.
What better way to build anew with Mafia, err, I mean EU money than to say they have no working refineries that can handle the demand!
An original conspiracy theory brought to you by yours truly --