It is called the “rocket and feather” effect and it is an economic phenomenon where consumer prices – particularly fuel prices – shoot up when the raw material cost increases (like a rocket) but fall very slowly when it decreases (like a feather). A terminology that has passed from jargon to gas stations, where wallets cry every time.
When will prices go down?
This is the question everyone would like to have an answer to, and which we turn to Mauro Lombardi, associate professor of Political Economy at the University of Florence.
What is happening?
«At this historical moment, supply chains are being redefined, including for oil and all raw materials. Immediately, financial markets react by driving up the price of the barrel. But there is a fact: when oil increases, the pump price (oil already purchased at earlier times) should not increase. It is a double speculation: financial and towards gas station owners.»
How can we intervene in the short term? Is cutting excise taxes effective?
«These are problems that cannot be addressed at the level of individual countries, and today there is division among states. “Individual” countermeasures can work if a country has its finances in order or has a monetary reserve to support, for example, the reduction of excise taxes: Italy has neither the first nor the second.»
What tools can give results in the medium or long term?
«Strategic clarity is needed from individual countries and cohesion among states, which today are disunited.»
Are there levers to force the big players to lower prices?
«Impossible, since they have power greater than individual national sovereignty. And they are making so-called reciprocal investments with the big tech companies: they have become so large that it is no longer possible to think of containing them.»
Could those who were once the “superpowers” intervene in this regard?
«The overall American debt (40 trillion dollars) weighs on global financial markets and could “burst” at any moment. Even the big tech companies themselves have excessive debt, over 2 trillion dollars: they build data centers but expect the first profits starting from 2030.»
And motorists? When will the “feather” fall?
«Much depends on the two war situations in Iran and Ukraine, on which the high tension in Turkey has been superimposed. At the moment it is impossible to make predictions.»
What if we abandoned fossil fuels?
«Here too, strategy is needed. Spain thought about it in time and today is a leader in renewable energy production; thanks to an Italian patent.»
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