Why does gasoline continue to cost so much? We have been experiencing a +39% increase for many months now compared to the same period in 2021, while diesel is going up +51% more, and in some areas, which are harder to reach such as the islands, gasoline price increases are even higher. What is the reason for the increase in the cost of gasoline? Let’s find out together.
Rising cost of gasoline: what’s going on?
The increase in gasoline prices by summarizing is the result of three causes:
- The increase in oil prices in general
- the effect of the dollar-euro exchange rate
- The combination of fuel excise duty and VAT
Obviously, the first two causes are related to the Ukrainian war conflict, while the third point is related to our country’s politics, and there have long been calls for action in this area.
The eternal issue of excise taxes has always featured prominently in election campaigns; for years there has been talk of inserting taxes without ever materializing them. Basically what are excise taxes and how much do they weigh on gasoline prices? Let’s find out together.
What are gasoline, gas and LPG excise taxes?
Not everyone knows what excise taxes are, but we know that they affect the high cost of gasoline. Excise taxes are basically indirect taxes designed to finance states of special need, sudden emergencies to essentially fund the state. We pay them on the manufacture or sales of some consumer products such as cigarettes, alcoholic beverages, electricity and lubricating oils.
As time went on, they were added to other taxes, ending up today as part of the cause of exorbitant gasoline costs.
Today, the combination of excise duty and VAT weighs as much as 56 percent on the final price of gasoline, and Italy holds the lead, after it is Greece, and Finland with quite high excise duties.
When will excise taxes be lowered the cost of gasoline?
It seems difficult to set a date since the succession of governments on the left and right have always talked about it and little acted on it. Certainly when the end of the Ukrainian conflict occurs there could be a turning point, but we are talking about assumptions that do not take into account the pandemic and political implications that could occur again. Instead, the solution could be a use of green and renewable energies that can accelerate the processes of decreasing gasoline prices, at least for the activities for which it will be strictly necessary. Therefore, we should not pollute the environment and think carefully when we use it.
What can we do when the cost of gasoline is high? Avoid using cars choose cheaper means such as bicycles, streetcars and scooters.
Definitely bearing the brunt of the high gasoline prices is the logistics sector, and the situation does not seem to be heading toward better prospects. Relying on structured, fast and reliable partners like us can make all the difference in your business.
