Gasoline approaching two euros per liter, diesel reaching 1.8. One of the greatest classics of the Italian summer is the hike in fuel prices to coincide with the August exit. Massimiliano Dona, head of the national consumer association, denounced “The holidays are a pain. The myriad speculations about the immigration of Italians traveling to reach the resort”. And who can blame him: look at the updated prices of the national network in the usual daily surveys. In recent weeks, there has been a truce most days in terms of pump prices, but always in the context of an overall price hike. What’s new this year is that this happens despite the existence of the Meloni government-enforced rule on average price disclosure at facilities, close to that enforced by distributors. For the avoidance of doubt, let’s say right away: the signs showing the average price of gasoline and diesel are not working. Not a panacea, but rather all price increases. And we explain why.

As of Tuesday, August 1, all gas stations are obliged to show the average fuel price outside the gas stations on the signs positioned next to the selling price they offer. This is a measure enshrined in a decree last January that was enacted after several controversies over oil price hikes, designed by the government to counter speculation (according to the government itself), increase transparency and encourage competition from gas stations. prices are lower. According to the law in question, managers of gas stations on motorways have to show the national average price, others the regional average price, taking into account the data provided daily by the Italian Ministry of Business and Made in. Fines ranging from 500 to 6 thousand euros may be imposed on fuel plant managers who do not report their prices and do not show the averages calculated by the ministry at the point of sale.

Because showing average fuel prices is useless.

Approximately two weeks after its entry into force, this obligation does not function at all. And since the beginning of August 2023, gasoline has been increasing rather than decreasing. Concrete doubts about the decree on the transparency of fuel prices were voiced in January when the competition and market authority (AGCM) rejected the government’s ruling. According to the authority, showing average prices can be useless or even harmful. At the hearing before the Chamber’s production activities commission on the transparency decree on fuel, Agcm president Roberto Rustichelli explained that it is “not necessary” to introduce a mechanism for calculating and disseminating the average reference values ​​for gasoline and diesel. “The benefits for consumers appear uncertain, rather than a possible reduction risk of competitive stimuli”.

Regional average fuel prices displayed at a petrol station on via Piaggio in Milan. LaPresse photo

The Agcm gave detailed justification for its opposition to the Meloni government’s initiative. According to Rustichelli, “since a fuel distribution facility actually competes with facilities located only a few kilometers away, the arithmetic average of the regional price very little represents the effective competitive environment in which a fuel distribution facility operates”. As a result, the Agcm president continued, “Due to reasons related to costs and logistics, the density of distributors and the level of demand, it can easily turn out that the price in a particular sub-area is different from the average, therefore not representative of the local situation and therefore of little benefit to the consumer. will create an indicator”.

Also, “beyond possible surcharges for traders, the expected double billboards may even confuse some consumers”. Furthermore, according to the AGCM chairman, “disseminating a regional average price among traders risks reducing price volatility, as this can be used by companies to automatically converge to a ‘focus price’, i.e. a clear parameter to avoid tracking. ‘discount war’.”

Read on today, these doubts have become granite certainties. So why did the government come up with this solution? Is it really useful to display average petrol and diesel prices? Balanced, no. The real problem does not concern gas station managers, who always impose minimal, almost negligible margins on prices (everything but speculation…). Even Adolfo Urso, the Italian Minister of Commerce and Made in charge, claims this. “It’s the refineries’ fault that oil prices are high. The refinery companies we asked to explain earlier apply higher margins.” into commercial fuel sold by gas stations. Also, the price of gasoline is affected by many factors, such as the trend of international markets, regardless of the speculation of individual gas stations.

At the time, just before issuing the decree on average-priced cartels, Prime Minister Giorgia Meloni rumbled against gas stations speculation, but that’s apparently not the case. Despite the election campaign announcements, the Meloni government did not renew the measure introduced by Mario Draghi’s manager in March 2022 to reduce the price of fuel, and completely abolished the special consumption tax reduction. This means that starting January 1, 2023, gasoline and diesel are 18.3 cents more expensive per liter, regardless of other intervening market factors. While there are signs of (bankruptcy) at average prices, it seems worth reminding the “presentful” prime minister or the forgetful reader during the days of August when oil is on the rise.

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