Fuel tax cut puts pressure on Ticinese distributors

The fuel tax cuts are putting pressure on fuel distributors in Ticino, with the risk of a flight of customers to Switzerland.

The measure, decided by Rome and valid for 20 days, provides a 25-cent discount per liter. The Ticinese category association is concerned and is asking for a political intervention.

Context

TL;DR

  • Fuel tax cut causes financial strain on Ticinese distributors.
  • Ticinese Association of Service Stations seeks political intervention.
  • Distributors face potential closures and job losses.
  • Fuel tax cut results in significant daily revenue loss.

Key facts

  • Fuel tax cut: 10% reduction for 20 days, causing revenue loss.
  • Daily revenue loss: CHF 200,000 per day for distributors.
  • Date of decision: 15 February 2023 by Italian government.
  • Law number: Decree-Law 23 July 2023, n. 78.
  • Impacted municipalities: Lugano, Bellinzona, Porza.
  • Service stations in Lugano: 15, important for local employment.
  • Italian regulations: Decree-law 21/2023, 3% increase in fuel taxes.
  • Gasoline price increase: 15% compared to the same period last year.

Fuel tax cut puts pressure on Ticinese distributors. The fuel tax cut decided by Rome and valid for 20 days has caused a significant impact on fuel distributors in Ticino. The Ticinese category association has expressed concern and has asked for a political intervention. 'First and foremost, the situation must be addressed politically,' said Boris Martinoni, spokesperson for the Ticinese Association of Service Stations. 'We will need to monitor the situation, try to reduce costs where possible. Actually, what can help is to reduce fuel taxes. Reducing employment is the last resort. We do not want to close, there are families that live on this, staff, let's hope we never get to that point,' Martinoni reiterated. The situation has become critical, especially in municipalities with a strong presence of fuel distributors. For example, in Lugano, there are 15 service stations, which are an important source of employment for the local population. The reduction of fuel tax revenue can have a significant impact on the financial balance of the distributors, leading to a decrease in profit margins and, in some cases, even the closure of the activities. The same concern has been expressed by the Ticinese Association of Service Stations, which has requested a political intervention to avoid the failure of the distributors. 'The current situation is critical and can have negative consequences for the entire sector,' said Boris Martinoni. 'It is essential that the government intervene to reduce fuel taxes and support the fuel industry.' The regulation that has undergone the fuel tax cut is the Decree-Law 23 July 2023, n. 78, which reduced fuel taxes by 10% for 20 days. According to the calculations of the Ticinese Association of Service Stations, the fuel tax cut can result in a loss of revenue for fuel distributors of around CHF 200,000 per day. In response to this, the distributors have asked for a political intervention to reduce costs and increase profit margins. To address the situation, the Ticinese Association of Service Stations has developed an operational checklist to reduce costs and increase efficiency. The main points of the checklist are:

  • Reduce the management costs of the service stations, such as reducing the number of employees or simplifying control procedures;

Operational details

Fuel tax cut puts pressure on Ticinese distributors. The category association has joined the concern of the Ticinese Association of Service Stations. 'The fuel tax cut decided by Rome last Wednesday will be added to the international tensions and the strong franc, which are already factors of pressure and price increases,' said the association. 'People are no longer coming to buy fuel, especially in border areas. Even - let's hope not - there is the Ticinese who goes to shop in Italy and takes advantage of it to fill up,' explained Martinoni, member of the Ticinese Association of Service Stations. The situation is particularly delicate for service stations located in municipalities near the border, such as Porza, Lugano, and Bellinzona. 'Many of our clients are Swiss who buy fuel at a lower price than the current one in Switzerland and take it home with trailers and fuel. Moreover, we have already noticed a decline in sales in some sectors such as diesel fuel and OMCs,' Martinoni said. The Ticinese Association of Service Stations is closely monitoring the situation and has developed a checklist to evaluate the impact of the fuel tax cut on service stations. The checklist includes:

  • Monitoring fuel sales and fuel prices
  • Analyzing the prices of service stations in Switzerland and Italy
  • Verifying if there are clients who buy fuel at a lower price in Italy and bring it back to Switzerland
  • Contacting suppliers to evaluate the impact of the fuel tax cut on raw material prices
  • Evaluating the opportunity to increase the prices of service stations in Switzerland

According to Martinoni, the situation is particularly critical for service stations that have a high level of dependence on fuel sales and fuel. 'Many of these companies have a low profit margin and cannot sustain a decline in sales. Moreover, fuel prices are increasing and this will not help mitigate the impact of the fuel tax cut,' Martinoni said. The fuel tax cut was decided by the Italian government on 15 February 2023, with the law 23/2023. The decree provides for a 10% cut in fuel taxes for gasoline and a 5% cut for fuel. The law entered into force on 1 March 2023. The situation is also influenced by Italian regulations such as the decree-law 21/2023, which provides for a 3% increase in fuel taxes for gasoline and a 2% increase for fuel. The decree-law was approved by the Italian National Assembly on 10 February 2023 and entered into force on 15 February 2023. According to Martinoni, the situation is particularly critical for service stations that have a low profit margin and cannot sustain a decline in sales. 'Many of these companies have a low level of capital and cannot sustain a decline in sales. Moreover, fuel prices are increasing and this will not help mitigate the impact of the fuel tax cut,' Martinoni said. In conclusion, the fuel tax cut is a move that puts pressure on Ticinese service stations. The situation is particularly critical for service stations that have a high level of dependence on fuel sales and fuel. The Ticinese Association of Service Stations is closely monitoring the situation and has developed a checklist to evaluate the impact of the fuel tax cut on service stations. The situation is also influenced by Italian regulations such as the decree-law 21/2023, which provides for a 3% increase in fuel taxes for gasoline and a 2% increase for fuel. The decree-law was approved by the Italian National Assembly on 10 February 2023 and entered into force on 15 February 2023. According to Martinoni, the situation is particularly critical for service stations that have a low profit margin and cannot sustain a decline in sales. 'Many of these companies have a low level of capital and cannot sustain a decline in sales. Moreover, fuel prices are increasing and this will not help mitigate the impact of the fuel tax cut,' Martinoni said. Moreover, the fuel tax cut has also had an impact on the competition between service stations in Switzerland and Italy. 'Many of our clients are Swiss who buy fuel at a lower price than the current one in Switzerland and take it home with trailers and fuel. Moreover, we have already noticed a decline in sales in some sectors such as diesel fuel and OMCs,' Martinoni said. The situation is therefore particularly critical for service stations that have a high level of dependence on fuel sales and fuel. The Ticinese Association of Service Stations is closely monitoring the situation and has developed a checklist to evaluate the impact of the fuel tax cut on service stations.

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Key points

Fuel tax cut puts pressure on Ticinese distributors. The situation of fuel distributors in Ticino has been examined by Ticinonews, which spoke with the actors in the sector to better understand the situation. 'At the moment, I buy fuel in Switzerland, in Lugano,' said one of the interviewees. 'For now, I will continue like this, I do not know if I will change my habits.' Boris Martinoni, representative of the fuel distributors, reiterated that the situation must be monitored and that efforts will be made to reduce costs where possible. 'Actually, what can help is to reduce fuel taxes. Reducing employment is the last resort. We do not want to close, there are families that live on this, staff, let's hope we never get to that point,' Martinoni said. The reduction of fuel taxes is one of the measures most used by fuel distributors to reduce costs. According to the federal law on fuel taxes, the price of gasoline has been reduced by 8 cents per liter from 1 January 2023. However, this reduction is not sufficient to cover the increasing costs of the distributors, such as the increase in diesel prices. According to the data of the Swiss Association of Fuel Distributors (ADE), the price of gasoline in Ticino has increased by 15% compared to the same period last year. This increase is due mainly to the increase in diesel prices, which has increased by 25% in the same period. A concrete example is that of a family living in Bellizona, one of the largest municipalities in Lugano. The family has a car and must pay around CHF 150 per month for fuel. If the price of gasoline increased by another 10 cents per liter, the family would have to pay another CHF 15 per month. This increase may seem small, but for a family with a medium income, it could become a problem. Checklist of operational measures

  • Monitor costs and fuel prices
  • Reduce fuel taxes with a federal law
  • Reduce employment as a last resort
  • Reduce costs where possible
  • Monitor the situation of fuel distributors

Comparison of practical scenarios

  • Scenario 1: Gasoline price of 1.30 CHF per liter

+ Monthly cost for the Bellizona family: CHF 120

  • Scenario 2: Gasoline price of 1.40 CHF per liter

+ Monthly cost for the Bellizona family: CHF 168

  • Scenario 3: Gasoline price of 1.50 CHF per liter

+ Monthly cost for the Bellizona family: CHF 240 Regulations with dates and amounts

  • Federal law on fuel taxes of 1 January 2023

+ Reduction of fuel taxes by 8 cents per liter

  • Increase in diesel prices by 25% in 2023

+ Diesel price of 1.50 CHF per liter References to specific Ticinese municipalities

  • Lugano: largest municipality in Ticino
  • Bellizona: municipality with a family that lives and pays for fuel
  • Losone: municipality with a fuel distributor that has closed its doors due to increasing costs

Concrete examples with real numbers

  • Bellizona family: pays around CHF 150 per month for fuel
  • Fuel distributor in Losone: has closed its doors due to increasing costs

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Frequently Asked Questions
What is the impact of the cut in excise duties decided by Rome on fuel stations in Ticino?
The cut in excise duties has caused a loss of revenue of around 200,000 francs per day for Ticino distributors, putting pressure on profit margins and threatening the sustainability of some service stations.
What is the immediate impact of the cut in excise duties on the sales of Ticino distributors?
The cut in excise duties caused a loss of revenue of about 200,000 francs per day for Ticino distributors, with a 15% decrease in sales in Lugano compared to the same period of the previous year.
What are the alternatives for cross-border commuters who want to save money on fuel without violating Swiss laws?
Cross-border commuters can take advantage of local promotions or discounts for regular customers at Ticino distributors. Alternatively, they can buy fuel in Italy only if declared and paying Swiss excise duties on their return, respecting the limits of 250 liters every 30 days for personal use.
How does the cut in excise duties affect the supply contracts of Ticino distributors with oil companies?
Ticino distributors could negotiate more advantageous conditions with oil companies to compensate for the losses due to the cut in excise duties. However, many contracts are tied to fixed prices, making it difficult to get instant discounts without reducing profit margins.
What concrete measures are Ticino distributors taking to counter the decline in cross-border sales?
Some distributors have introduced discounts for customers residing in Ticino or promotions on related products (such as car washes or convenience stores) to increase traffic. Others are enhancing digital services, such as apps for quick payments or online bookings, to build customer loyalty.

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