The Italian government is poised to implement immediate and temporary measures to counteract soaring fuel prices, particularly for diesel. This initial intervention aims to provide relief ahead of the high-traffic summer holiday period in August. The Ministry of Enterprises and Made in Italy reported Sunday's average self-service prices at $2.15 per liter for petrol and $2.36 per liter for diesel on the road network, with even higher prices on motorways.
The proposed strategy involves a "bridge" decree, which will likely focus on an initial cut to diesel taxes. This first phase will be followed by a more comprehensive intervention around August 4, when the Council of Ministers is scheduled to meet. During this meeting, the government plans to finalize a "mobile excise duty" mechanism, utilizing surplus VAT revenue from July, once the Ministry of Economy and Finance (MEF) quantifies the available resources. This approach echoes earlier, similar interventions that saw $1.8 billion in aid delivered between March and July.
While the government has already spent approximately $4.3 billion previously on similar measures, a new immediate intervention requires about $130 million to $150 million to cover the initial phase and its potential extension. However, current available funds from the extragettito Iva are limited to under $32.5 million. The government is hoping the July VAT surplus, estimated at $270 million, will be available in early August to fund the broader initiative. Alternatively, some within the majority suggest a more targeted approach, such as providing $87 to $108 contributions to approximately 1.2 million low-income families already benefiting from the "Dedicata a te" card.
Simultaneously, Italy is actively seeking greater fiscal flexibility from the European Union to support households and businesses facing energy cost pressures. Maurizio Lupi, president of Noi Moderati, confirmed the government's commitment to activating $15.2 billion in flexibility granted by the EU for energy-related support. This move aligns with Italy's ongoing efforts to protect purchasing power and industries while adhering to an agreed deficit reduction path with the EU. However, the European Commission and the International Monetary Fund have previously criticized across-the-board excise duty cuts, advocating for more targeted aid to vulnerable families. bloomberg.com
The government, led by Giorgia Meloni, views the energy crisis as a top priority. Discussions are ongoing with Minister Giancarlo Giorgetti to devise effective strategies. The Council of Ministers will convene on Monday to discuss new measures, focusing initially on diesel prices, with further interventions planned for August 4. The looming summer exodus and strong domestic pressure from within the ruling majority underscore the urgency of these actions to stabilize fuel prices before the peak holiday season.
