Italy Set to Unveil Energy Relief Package Next Week, Says PM Meloni

Italy's Energy Relief Measures

By Giuseppe Fonte

ROME, Feb 12 (Reuters) - The Italian government plans to adopt a package of measures next week to help families and firms cope with high energy prices, Prime Minister Giorgia Meloni said on Thursday.

Government officials said the measures would be worth up to 3 billion euros ($3.56 billion), although the government was still discussing options to cover its funding needs without increasing Italy's deficit-to-GDP ratio.

Target Beneficiaries

"Next week we will present detailed measures on energy bills," Meloni told reporters before an EU leaders' meeting in Belgium.

Government's Strategy

Low- and middle-income families and small businesses will be the main beneficiaries of the aid package, the officials said.

Market Context

The government wants to narrow the spread between wholesale gas prices in the Amsterdam hub and Italy, as a way of reducing domestic energy bills, they added, blaming market inefficiencies, transport costs and speculative moves.

The wholesale price for natural gas traded on the Italian market, the PSV, is normally higher than the TTF, which is traded in Amsterdam, by some 2-4 euros per megawatt hour.

"We must curb speculation surrounding the energy pricing system," Meloni said.

Under pressure from Italy's business lobbies, known for their repeated calls for corporate tax cuts and state subsidies, the government had been considering more decisive measures to spread levies weighing on energy bills over several years under a securitisation scheme.

Rome put them on hold, however, due to their negative impact on the country's state coffers.

Italy has committed to bring its deficit below the EU ceiling of 3% of GDP starting from this year, despite weak growth prospects.

Power costs in Italy are significantly higher than in France and Spain, while more than 40% of electricity is produced with gas.

Meloni also said the EU needed to thoroughly review the bloc's Emissions Trading Scheme (ETS) and adopt further measures to fight speculation keeping energy prices high.

The ETS is the EU's most important climate change policy. It forces power plants and industries to buy CO2 permits when they pollute, and caps the amount of permits in the market, to curtail emissions over time.

($1 = 0.8418 euros)

(Reporting by Giuseppe Fonte; editing by Philippa Fletcher)