| MILAN, Sept 25
MILAN, Sept 25 In car-mad Italy, record-high
petrol prices are changing the motoring habits of a lifetime.
Take Piero Bettini, a 56-year-old metal industry parts
salesman from Bologna. Bettini, who drives around 5,000
kilometres a week, owns two diesel-fueled cars: a spacious Volvo
XC70 and a smaller, fuel-efficient Hyundai iX20.
"I used to just use the Volvo because it's bigger and more
comfortable and left the Hyundai to drive in the city," Bettini
said. "But now I'm using the Hyundai most of the time, including
holidays, because it's cheaper."
Prime Minister Mario Monti's decision to hike petrol taxes
to rake in much-needed revenue has pushed up fuel prices by 15
percent over the last year, making them the highest in Europe.
Prices at the pump recently broke through 2 euros per litre
in some stations, a psychological threshold for car enthusiasts
in the home of gas-guzzling sportscar marques such as Ferrari
Average prices across Italy are around 1.87 euros a litre,
compared with a European Union average of 1.60 euros, according
to Italian auto industry think tank Promotor.
"It's all a bit too much. Italians are traveling shorter
distances, they're using the train more, they're even going on
holiday together to cut costs," said Orazio Rienzi, president of
consumer group Codacons.
As the recession bites, the government is looking for
revenue streams to meet the soaring costs of the world's
fourth-biggest public debt. And with car ownership one of the
highest in the world, at around 60 cars for every 100 people,
petrol seems an obvious choice.
Taxes account for some 60 percent of pump prices. In the
first eight months of the year the state raised 24.5 billion
euros ($31.6 billion) in fuel taxes, up 17.4 percent on the
year, according to Promotor.
According to the national farmers' association Coldiretti,
w ith petrol at 2 euros per litre, Italian families are spending
more per week on filling their car than on food, forking out 120
euros for a 60-litre tankfull compared with a food bill of 110
All the signs are that Italians are driving less. Atlantia
, the company that operates most of Italy's toll roads,
said traffic volumes in the July-August holiday period fell 5.9
percent on the year before, while traffic on the fast inter-city
trains rose 13 percent in the first half.
Car-sharing schemes are also boomimg. "In the last year car
pooling has jumped 250 percent in response to rising fuel and
costs. Some people have ditched their second car, some even
their first," says Marco Menichetti, who works on the traffic
desk of environmental protection watchdog Leg a mbiente in Milan.
With more than 80 percent of commercial goods transported by
road, dearer fuel could feed through into store prices and
clobber consumer spending.
"Italian diesel prices are 23 eurocents more than the
European mean. That puts us at a real competitive disadvantage
in an EU market where there's supposed to be a level playing
field," said Cinzia Franchini, president of national hauliers
High fuel prices could also exacerbate a slump in car sales,
including those of carmaker Fiat, which has seen its
sales falling to levels not seen since the 1970s.
"It's not just fuel, it's insurance, car tax, parts, the lot
- everything's going up. I've always changed cars regularly, but
this year I'm hanging on to the old one," said Marco, a
43-year-old salesman in Milan.
In August, new car sales in Italy fell 20 percent on the
year before, their ninth consecutive double-digit fall. Jacques
Bousquet, president of Italian foreign carmakers association
UNRAE, said motorists are increasingly in the market for
vehicles that consume and pollute less, with LPG-powered cars
sales for instance holding up well.
But soaring petrol prices have also created something Italy
hasn't been much good at over the years - competition. More and
more distributors are putting together special offers and are
structuring deals with retailers to attract clients.
Eni SpA, Italy's state-controlled oil and gas
group, had motorists queueing up outside its stations this
summer when it offered discounts of around 20 cents per litre at
self-service stations over the weekend.
IP, owned by Italian refiner Api, and Exxon Mobil's
Esso, were quick to follow suit with end-of-summer discounts,
while the Q8 network set up an agreement with supermarket chain
Esselunga offering 8 euros off a purchase of at least 40 euros.
But station operators are feeling the squeeze. "We've seen a
big slump in sales since the government hiked taxes in December.
Drivers are now spending 10 to 20 euros a go, rather than 50
euros, to keep cash in their pockets," said Francesco Squeri,
who runs a filling station on Milan's expressway.
Italy has one of the most fragmented fuel distribution
networks in Europe, with some 23,000 stations, about double
those in some like-sized countries such as France and Spain,
according to the Italian government.
That is triggering a lose-lose situation of dwindling
margins for the operator and higher prices for the consumer.
The government has said it intends to reform the sector,
introducing more self-service stations and making it easier for
operators to sell other petrol brands and non-oil products.
"I don't buy petrol from brand retailers any more, but use
independent service stations where I spend 6 to 7 percent less,"
Bettini, the Bologna salesman, said.
But even though Italy may be coming off its auto addiction,
not every Italian tradition is under threat. Fiat's new 500
model, the 500L, offers an espresso machine as an optional
extra. Early days yet but feedback has been positive, Fiat says.
A Fiat and an espresso. What could be a more Italian