The diesel discount is paid for by the VAT on a full tank
22 September 2026, 16:06
So, diesel. Yesterday, according to Ministry figures: €2.335 a litre at the self-service pump. The fuel of vans, lorries and company cars: of the people who drive to earn a living.
The State has stepped in, mind you. It cut excise duty by 12.2 cents a litre: eight days in full, then another ten at half that. Eighteen days in all, from 18 September to 5 October. And from 5 October there is no going back: something else kicks in, the so-called ‘mobile excise duty’ mechanism. Park that for a moment, because it is the part worth the price of admission.
Now the multiplication, the only thing that takes announcements apart. A van on the road all year guzzles three thousand litres. Over all eighteen days of the discount, €13 stays in the pocket. Not per day: €13 in total, for the entire life of the measure. And that's gross. €13, when filling that van's tank costs €160.
But that isn't the big part. The big part is where that €13 comes from.
Mobile excise duty works like this. Diesel carries VAT, which is a percentage of the price. So when diesel goes up, the VAT paid rises on its own: the dearer the pump, the more VAT money flows to the State. Not because the State has done anything — because people paid more at the pump.
That extra revenue was put in by whoever filled up. Litre by litre, swearing at the display.
And here the matter gets subtler than the way it is being told. A business certainly pays VAT on diesel, at the pump, straight away: but then it deducts it from the VAT it owes the Treasury. It goes out and comes back in; it is cash, not a cost. The State doesn't keep that money. It keeps only the money of those who cannot deduct VAT: households. The family car on a Sunday, and anyone who starts the engine every morning to get to work.
Then the law says that this very money comes back in the form of lower excise duty.
Worth reading slowly: part of what has just been overpaid is handed back, and they call it a discount. The State doesn't put in a single euro of its own: it gives back a slice of what it has just collected on top. And from 5 October it isn't even a temporary measure any more, with its own expiry date and its own decree. It is the system: it starts by itself, automatically, every time the price goes up.
For anyone who owns a business there is one more step. The van's €13 was funded by filling up the family car, the one used for the school run. Business and family are the same pocket: even those who write the decrees know that.
Try doing it with a customer, just to see the effect: raise their price list, collect more, and with part of the extra give them a limited-time promotion. Then watch the look on their face.
And yet, amid the outrage, it is worth remembering that on the other side of the table they know how to do the maths. When a customer asks for a three per cent discount and it sounds like nothing, they have already multiplied it by a year's worth of units.
Whoever asks for it does the maths before asking. Whoever announces it is counting on nobody doing it.
This article was prompted by a news item published in ANSA.