The President of Nomisma Energia, Davide Tabarelli, explains to Fanpage.it that this is a scenario that is currently unlikely but not impossible.
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“If the pipes from Russia were closed, inflation would rise to 14% and petrol would reach 3 euros per liter.” Davide Tabarelli, President of Nomisma Energia and Professor of Economics at the University of Bologna, sounded the alarm on Fanpage.it’s microphones. The teacher points out that this is an unlikely scenario at the moment, but also adds that his predictions have been contradicted several times in recent months given the volatile situation in Ukraine.
What could happen in Italy if gas supplies from Russia were cut off?
The scenario of stopping Russian gas (with the end of supplies from Europe or from Moscow) is currently not very reliable, as everyone is afraid of a cut in imports. The effect would not be sustainable, the price would exceed 300 euros per megawatt hour and inflation would rise to 14%. But we are in a war and in the last few months the facts have proved me wrong many times so you have to be careful because anything can happen.
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We had inflation up to 17% in the 1970s, but somehow we held up.
True, but we didn’t have that much debt. This is Italy’s main problem, but I would say in general terms that these are the major economies in the world. Back then we weren’t affected by a pandemic, there wasn’t as little oil and we didn’t use as much energy as we do now. Finally, the reductions in supplies, then oil, were severe but temporary.
Speaking of oil, with the halt of all supplies from Moscow, how much can gasoline reach?
Even at 3 euros per liter, with a market price between 200 and 300 dollars per barrel. We should ask Saudi Arabia, but it would not meet our needs and would trigger an upward spiral in prices. It would be a disaster: it’s a frightening hypothesis, even if, I repeat, unlikely for now.
And if it happens, what do we do?
In Italy there is an emergency plan, but in any case, regardless of deterioration, more coal and more wood must be used for heating. Also, consumption should be partially rationed and the hope of importing gas from other countries while promoting more of it in Italy. In conclusion: we need an upper limit for gas and oil prices at European and, if possible, international level.
Can the European Commission’s RePowerEu plan help to calm prices? There is talk of saving about 100 billion cubic meters of gas in a year and another 55 later.
These are unrealistic numbers in the short term. It would work if we just went to solar panels and wind turbines, but unfortunately that’s currently impossible: it will take time. The prospect for us to stop importing gas and oil from Russia is longterm.
Italy adds that a true common energy market with shared storage and a gas price cap are needed.
The common gas market already exists, it needs to be implemented to make storage operations more effective, but maybe this way the problem could be solved. Politicians make announcements that hardly correspond to reality. We can invent the most sophisticated management for our memory, but the substance doesn’t change. Certainly, however, we must avoid doing it like last year, where we found ourselves without supplies at the beginning of winter.
In the meantime, there is also talk of tightening sanctions against Russia. Istat is already talking about a negative effect of 0.7% on GDP: is there no risk of hurting us?
I see little courage on the part of the European Union: certainly we will be hurt and there would be further repercussions on GDP, but we are talking about a war in a European country. Let’s imagine we see our supermarket under the bombed house, in front of it is the Italian GDP in the background. If things get drastically worse then apart from 4% growth to 3% we’re going to be in a recession, but that’s a problem around the world.