Miracle at Christmas. A decree issued by Palazzo Chigi could reduce prices across Italy, just as the flapping of a butterfly’s wings can cause a hurricane on the other side of the world. Meloni effect, or butterfly effect, the government took credit for the slowdown in inflation and the decline in fuel prices, thanks to the tricolor tram and the display of the average price at gas stations. It was enough just to ask, put it in writing, and wonder, and prices dropped. A miracle. Because it cannot be explained otherwise. And since we are coming to the end of the year and it is time to take stock, the government is rolling out another marvel: Italy has become the locomotive of Europe.

Ministers and majority members have been repeating this for months: Italy is growing more than others. All European states are clinging to the tricolor locomotive to be dragged inexorably along the path of growth and prosperity. Unfortunately, saying this indefinitely will not improve the situation: forecasts from the EU, the International Monetary Fund and the OECD say otherwise. In the chart you can see Italy’s position according to the European Commission’s autumn forecasts: Italy appears to be in the second class, towards the end of the convoy, rather than a locomotive.

But be careful, there are not only miracles, we are also talking about ghosts: who remembers the mobile consumption tax?

View: excise tax is mobile

The mobile consumption tax appeared and then disappeared. The measure is part of the government’s statements that remain unchanged and are then followed by harsh realities. To combat the rise in fuel prices, the Meloni government proposed this in January 2023. The mechanism is not new, it dates back to 2008: in short, it is the state’s waiver of VAT collection on excise taxes under certain conditions. Increases in the Brent oil index to protect drivers from high prices.

But the government decree did not introduce any automatism and left everything in the field of possibilities. Disappearance after emergence: The mobile excise tax was never adopted because state coffers benefited from a rise in fuel prices at a historical moment of economic weakness. According to data from the Ministry of Economy and Finance, the Treasury collected approximately 20 billion euros from SCT on energy products in the first ten months of 2023 alone. These days it makes almost as much sense as a financial maneuver.

So there is no mobile consumption tax, but even the consumption tax, the old workhorse of the centre-right, is not cut. They wanted to eliminate “all”, but only during the election campaign. The good times when Meloni wandered around gas stations asking about gas prices or when Salvini wrote on the blackboard that he wanted to reduce “seven excise taxes”; This was an unprecedented interruption, because the approach taken by the League leader did not cause any problems. It has persisted for decades longer. More than being “mobile”, SCT is “immobile”: it remains where it is.

Therefore, given the drop in fuel prices, the mobile excise tax has seemingly disappeared. Miracle?

Miracle: Cartels that reduce fuel prices

In 2022, the Draghi government cut excise taxes, in 2023 the current government reintroduced them, causing a physiological increase in prices. However, Meloni & co. They attributed the increases to an imaginary enemy, “speculation,” and decided to fight this enemy with a formidable tool: the cartel. Thus, it was decided to make it mandatory to display regional average prices in addition to the prices charged at fuel stations.

Italian Minister of Trade and Made in Adolfo Urso proudly announced: ”Every citizen can verify for himself whether the price at the gas station corresponds to the average price and therefore decide whether to refuel or not. “If the price is very different from the average price, you can report this to the ministry,” he said. The miraculous cartel with average fuel prices came into force on August 1, 2023, but the savings effect came several months late.

The graphs show the Brent index, which is the raw material of fuel and the reference in the formation of oil prices, and the trend in gasoline and diesel prices in Italy, respectively. The red arrow points to August 1, the date of entry into force of cartels with regional average prices, and the hypothesized effect is not visible: from then on, prices rise and then fall in October. No miracle happened: despite Minister Urso’s appreciation of the “transparency operation”, the fuel price followed the Brent trend as always.

Antitrust (Agcm) had also stopped the operation in its infancy: the Authority described it as “unnecessary”; “Benefits to consumers appear uncertain given the risk of reducing competitive incentives.” In Agcm’s opinion, the powerful cartel tool was designed by the Ministry of Urso that “beyond possible additional costs for traders, could even cause confusion for some consumers.” Not just the lack of a price miracle, but also the potential damage.

Tricolor tram hitting prices

The final miracle vehicle is the Tricolor Chariot. The place where the events take place is once again the Italian Ministry of Commerce and Made in Italy. The initiative offered a 10% discount on some essential products in participating supermarkets to “encourage price control to counter inflationary pressure and prevent it from becoming structural, and to preserve the purchasing power of consumers, especially families,” we read from the government. Website on the day the “agreement” is signed with companies in the sector.

The effort is laudable, the celebrations extravagant. Modest reductions saved around euros and, of course, did not reverse the inflation trend. A simple fact to read: Prices in general are falling in Italy, it is true, but the prices of some discounted items in the tricolor shopping basket, such as fresh fruit, oils and household products, continue to rise. .

Now the “Fighting Inflation Quarter” will be suspended as planned because, according to Minister Urso, “the goal has been achieved”. So mission accomplished, we have Christmas stories to tell this year too, thanks to the miracles of the government, which has lowered prices by decree and verbally improved the economy. All that remains is to wait: who knows what will happen at Easter?

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