Italy decides to reduce fuel tax to limit rising prices

The Italian government has agreed to a temporary reduction in excise taxes on fuel, in an attempt to help the population cope with rising costs caused by the Iran war.

Prime Minister Giorgia Meloni said that her cabinet agreed to reduce fuel taxes by 0.25 euros ($0.29) per liter, as part of a broader package of emergency measures to confront rising energy prices.

In turn, Deputy Prime Minister Matteo Salvini said, “The cost of these measures amounts to hundreds of millions of euros, and they will remain in effect for a limited period only.”

While the Italian government reduces taxes, it requires oil companies to set fuel prices, with a maximum of 1.9 euros per liter of diesel, Salvini said.

Italy, like other governments, is reviewing available alternatives to help consumers quickly overcome the sudden price shock. Salvini indicated that the government may also consider imposing taxes on the additional profits that energy companies make from selling fuel at higher prices.

He said: “I hope we will not have to reach this stage,” noting that talks with energy company officials will continue in the coming weeks.

The average price of a liter of diesel at self-service stations on the Italian national road network was 2.1 euros, while the price of a liter of gasoline was 1.87 euros, according to the Italian Ministry of Industry. Italian authorities have intensified oversight of the energy supply chain amid concerns about potential speculation.