Mario Di Fiore, 63, shot Nicola Lombardo, 44, in the back on Saturday at around 3pm at a petrol station in Palermo. The bullet hit Lombrado in the spleen and he later died from his injuries following a six-hour operation.
Di Fiore was arrested on Saturday night after his licence plate was identified on CCTV. He was taken in for questioning and later confessed to shooting Lombardo with a gun that he had obtained illegally.
As a motive Di Fiore explained that they had argued over the price of fuel, Giornale di Sicilia reported.
The pensioner's shock confession brings a bizarre ending to bloody killing which had initially confused the police who suspected it had been a mafia hit.
At first investigations had focused on private life of the victim, who had worked for a short time at the petrol station, which belongs to the brother of a man killed by the mafia.