With the crisis in the Strait of Hormuz, the price at the pump of petrol and diesel in self-service mode has now exceeded the psychological threshold of two euros per litre. The Meloni government tried to mitigate the shock by intervening several times with temporary reductions in excise duties on fuel.
The tax component continues to represent a huge part of the price at the pump and, in the case of petrol, even exceeds the industrial price after taxes. But in recent months the percentage relating to refining costs has only increased, reaching a weight of between 11 and 17 euros in a 50-litre tank.
Having refineries does not eliminate energy dependence on foreign countries, because Italy imports almost all the crude oil it processes. But it retains the ability to transform it domestically and reduces dependence on the import of already refined petrol, diesel and jet fuel: a difference that became crucial during the Hormuz crisis. The gradual decommissioning or conversion of plants exposes countries even more to geopolitical events. And Italy is a clear example of this.
What we pay
Before going into the merits of the current situation, it is necessary to remember how the price of the fuels we use every day is made up. As a reference you can take the latest survey of average weekly prices. In that of 7 September, referring to the previous week, the Ministry of the Environment reports the price per thousand liters of petrol (2,034.68), car diesel (2,141.82) and LPG (769.08).
The report also provides the quotas relating to excise duties, VAT and the net cost. The latter value is given by the price of oil dictated by the market, the costs and margins of refining and those of distribution. At current figures you would pay 0.994 euros per liter of petrol.
To this number must be added the excise duty, since 1995 it has been unique, all previous additional taxes have been merged, and the VAT at 22 percent. Therefore, 0.672 euros per liter and 0.366 euros per liter are added respectively, arriving at a total of 2.034 euros per litre. Now that it is clear how the price at the pump works, the post-crisis situation of Hormuz can be analyzed with greater awareness.
The weight of refineries
An article published by some ECB researchers describes the price trend until the end of July. Analysts write that in the last week of February, refining costs and margins contributed 0.13 euros to the retail price of diesel, in line with the historical average since 2021. This component, however, skyrocketed with the geopolitical shock triggered by the Israeli and US attacks on Iran. So much so that this variable recorded an increase of 168 percent compared to the end of February.
In recent months, analysts say, it has been the refining margins that have made the difference in prices. The closure of the Strait of Hormuz resulted in a decline in global exports of refined products of approximately 4.5 million barrels per day in the second quarter of 2026. The price component linked to refining went from a monthly average of 0.10 euros per liter of diesel in February to 0.26 euros in March. But in the first three weeks of July the constant tensions caused the price of diesel to reach 0.35 euros at the margins and 0.23 euros for petrol. And according to the article, the peak was recorded in August and then returned to 0.16 euros by the end of 2027.
The cost of imports of finished products
We don’t always see such incidents. Under normal conditions, the prices of refined fuels and crude oil move almost in lockstep from month to month. If there are gaps, it is usually due to the different refining processes that the various refined products must undergo and the variation in supply and demand.
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All conditions that combine with another variable specific to the European continent: the decommissioning or conversion of its refineries. And our country, nicknamed in the past “the refinery of Europe” thanks to its dozens of plants at the time of the peak (now there are 11 counting the biorefineries), knows this well.
From 2000 to 2024, we read in the UNEM 2025 statistical appendix, Italy lost 12.7 percent of its oil refining capacity. Since 2011, three refineries, all owned by Eni, have been converted into biorefineries (Porto Marghera in 2014 and Gela in 2019) or are in the process of being reconverted (in Livorno it should be finished by 2026). In the same period, other plants were closed or transformed into storage hubs for petroleum products, such as that of Tamoil in Cremona since 2011. In the meantime, imports of finished products have gone from 12.7 million tonnes in 2010 to 16.1 million tonnes in 2025 (+ 26.7 percent).
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And as the association representing companies operating in the processing, logistics and distribution of petroleum products points out, incoming refined product flows are the ones that could be most affected by the evolution of the current geopolitical crisis. Especially diesel and jet fuel where imports from the Middle East and Asia account for over 57 percent and 19 percent.
A “community” problem
As mentioned, not only Italy, but all of Europe has left the refining sector unprotected. Since 2009, he has denounced the association FuelsEurope35 refineries have closed, reducing production capacity by 20 percent, while energy costs remain structurally higher than competing regions.
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Italian and European systems have been sacrificed on the altar of convenience. Among the various factors that led to the divestments, production costs played a role. Especially if you consider that European legislation is very rigorous in environmental and labor terms. Also for this reason, together with the stagnant demand and the changing market, it was preferred to close the doors of local refineries to buy the finished products abroad. In the long run, however, the economic advantage has exposed countries even more to geopolitical shocks in the Middle Eastern area and beyond.
The most striking case was that of the ISAB plants located between the municipalities of Priolo Gargallo, Melilli and Siracusa. A “strategic” refinery, as Meloni and his ministers have repeatedly recalled, which risked stopping due to sanctions on Russia after the invasion of Ukraine. In 2023 the plants passed into the hands of the Cypriot Goi Energy and in May 2026 Ludoil energy, of the Ammaturo group, signed an agreement to acquire control. On September 8, Ludoil took control of the plant.
What would have happened with more European refineries
Europe has eliminated about a fifth of its refining capacity in fifteen years, in the order of 3 million barrels per day. When the Gulf crisis took about 4.5 million barrels a day of refined products from the market in 2026, that spare capacity was no longer there. Having more refineries would not have avoided the high fuel prices of 2026, because the price of oil would have increased anyway. But it would probably have attenuated the second component of the shock: the shortage of petrol and especially diesel.
Assuming that only half of the plants lost since 2009 were usable, Europe would have had a production buffer of the order of 1.3-1.4 million barrels per day: about a third of the global shock. According to Dossier’s estimates, the summer increase in diesel prices in 2026 could have been lower in the order of 5-10 cents per litre, equivalent to around 15-30% of the increase recorded at the pump and up to 40% of the extra cost due to refining.
Closing plants may be convenient when the market works, but it becomes expensive when global chains break. Suffice it to say that the excise duty cut launched by the government costs 12 million euros a day. According to Dossier’s simulation, greater European refining capacity could have reduced Italians’ spending on diesel alone by around 1.2 billion euros during the crisis, a value equivalent to around 60% of the 2 billion and 74.5 million euros that the State has instead spent to regulate fuel through excise duties from 19 March until today.
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