Italy Drafting Urgent Measures to Cut Fuel Prices, Deputy PM Says

Italy to cut excise duties to soften fuel prices, Deputy PM says

By Elisa Anzolin and Giuseppe Fonte

Government Measures to Address Rising Fuel and Energy Costs

MILAN/ROME, March 18 (Reuters) - Italy will cut excise duties on fuels on Wednesday, Deputy Prime Minister Matteo Salvini said, as the government looks for ways to help families and businesses cope with higher energy costs triggered by the war in the Middle East.

Cabinet Discussions and Relief Scheme Details

Addressing reporters in Milan after meeting representatives of main petrol station networks, Salvini said a cabinet meeting was scheduled later in the day to discuss the package.

Pilot Relief Scheme Funding

"We are talking about several hundred million euros of state money for a one-month pilot relief scheme," he said.

Italy has previously said it would fund the excise duty cut through the higher VAT revenue it was receiving as a result of higher prices.

Targeted Fuel Price Reductions

Salvini, who leads the co-ruling hard-right League party, said the aim was to bring the price of diesel below 1.90 euros ($2.19) per litre from 2.10 euros now.

The cabinet is expected to meet at 7 p.m. (1800 GMT), officials said.

Broader Economic and Political Context

Energy costs are a major headache for Prime Minister Giorgia Meloni, who also faces a key political test when Italians vote on March 22-23 on a highly divisive government plan to reform the judiciary.

Engagement with Energy Companies

Salvini said he had summoned companies including state-controlled energy group Eni to hear their proposals, adding the government was ready to hike taxes on firms taking undue benefits from the energy crisis.

Monitoring and Tax Measures

"The companies have told us that they aren't speculating, but of course we’ll be checking," he said.

Italy last month increased its IRAP corporate tax on energy firms to help fund measures aimed at lowering wholesale electricity prices, a move that would yield state coffers around 1 billion euros through 2028.

EU Policy and Carbon Permit Scheme

Meloni is also lobbying EU peers to freeze the ETS carbon-permit scheme to soften energy bills.

The Emissions Trading System (ETS), which is the EU's most important climate-change policy, forces power plants and industries to buy CO2 permits when they pollute - and caps the number of permits in the market - to curtail emissions over time.

Additional Information

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(Reporting by Elisa Anzolin in Milan and Giuseppe Fonte in Rome, editing by Andrei Khalip and Nia Williams)