Italy is exploring a flexible mechanism to alleviate fuel duties in response to rising energy costs affecting households and businesses, according to Prime Minister Giorgia Meloni. This potential move comes after the expiration of a temporary diesel tax reduction, which had been gradually lowered to 6.1 cents per litre before expiring on Tuesday.
Following the cessation of the reduction, fuel prices have seen an increase. Notably, Eni, a major energy company, raised the maximum diesel price at its stations from €2.19 to €2.25 per litre, although the price cap for unleaded petrol has remained at €1.99 per litre. In response, the Italian government has urged energy companies and fuel retailers to maintain temporary price caps to mitigate the impact on consumers.
The proposed mobile excise-duty mechanism would link fuel tax reductions to additional VAT revenue generated from rising fuel prices. This system aims to use part of the additional revenue to offset higher costs, thereby offering relief to consumers. Prime Minister Meloni indicated that approximately €170 million has been accumulated since September, which could potentially be harnessed for further relief measures. However, officials are still deliberating whether to deploy these funds immediately or reserve them for future needs.
The government plans to continue monitoring the effectiveness of existing fuel price caps in containing costs before deciding on further actions. This ongoing assessment will determine the next steps in Italy’s strategy to manage the impact of fluctuating energy prices on its economy and citizens.