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ENERGY

How will Italy’s energy prices change in April?

April is the start of a new quarter and in Italy that means energy tariffs are revised. How much more - or less - can we expect to pay?

How will Italy's energy prices change in April?
Photo by Niklas HALLE'N / AFP

The price consumers in Italy pay for gas and electricity has risen for the past six consecutive quarters, leaving households and businesses facing record high energy bills.

With the price of gas soaring in March due to the impact of the war in Ukraine, the common assumption is that household energy prices are only going to rise further when the next quarter’s tariffs kick in on April 1st.

READ ALSO: Who can claim a discount on energy bills in Italy?

But it’s not certain yet by how much – or even if – our bills will be hiked up even further next month.

Italian energy regulator Arera is yet to publish its new rates for April to June.

While the energy body is analysing trends in both gas and electricity to adjust its prices for the second quarter of 2022, tariffs have been widely predicted to rise once again in April.

Increases of 25 percent for electricity and 2 percent for natural gas are likely, according to Nomisma Energia.

While gas prices are expected to remain almost “stationary”, the energy authority stressed that new tariffs for electricity are “uncertain” and “will depend on the price trend in the coming days”.

READ ALSO: Rising energy prices: How to save money on your bills in Italy

Nomisma predicts that gas prices will come in at around 80 euros per megawatt hour, which is “in line with that of the last adjustment”.

However, some reports suggest the opposite. Newspaper La Repubblica reported this week that the tariffs could, in fact, be revised slightly downwards.

This would be a welcome break from the upward trajectory – though would still be unlikely to compensate for January’s huge increase of 55 percent for electricity and 40 percent for gas.

In addition to billions of euros’ worth in previous funding from the Italian government aimed at keeping bills under control, Italy will offer new discounts on household energy bills under an updated scheme announced last week.

Under a new ‘Social bonus for electricity and gas’, support has been extended to more households from April 1st until December 31st 2022.

The measure forms part of a wider package worth €4.4 billion to curb the war’s economic impact on Italy, including a temporary reduction in fuel prices for motorists – which the government says will be funded by a one-off tax on energy companies’ “extra profits” this year.

READ ALSO: ‘The impact is zero’: Energy giants not worried by Italy’s tax on profits

Hundreds of thousands more families can now claim the discount on utility bills, as it will be available to those with an ISEE of up to €12,000 – an increase of the previous figure of around €8,000.

The size of the new discounts is yet to be confirmed, but between January and March this year the scheme saved eligible households anywhere between €165 and €800.

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ENERGY

How long will it take Italy to wean itself off Russian gas?

Italy's government has repeatedly said it plans to end its dependence on Russia for gas supplies following the invasion of Ukraine. But as the timeline keeps changing, when and how could this happen?

How long will it take Italy to wean itself off Russian gas?

Italy is heavily dependent on Russian gas, but has been seeking new sources since Moscow’s invasion of Ukraine as part of an effort to end this reliance in the coming years.

But it remains unclear whether Italy can really end its dependence on Russia for its gas supply – or when this might be feasible.

READ ALSO: What does Italy’s Algerian gas deal mean for energy supplies?

The government has been seeking new sources since Moscow’s invasion of Ukraine, including with a recent deal to boost supplies from Algeria.

Prime Minister Mario Draghi said last week the country could be independent of Russian gas by the second half of 2024 – the latest in a series of changing estimates.

“Government estimates indicate that we can make ourselves independent from Russian gas in the second half of 2024,” Draghi told the Senate, while adding that the “first effects” of this plan would be felt by the end of this year.

He said his government was also seeking to boost its production of renewable energy, including by “destroying bureaucratic barriers” to investment, saying it was the “only way” to free Italy from having to import fossil fuels.

Explained: Why and how Italy will pay for Russian gas in rubles

In April, Italy‘s Ecological Transition Minister Roberto Cingolani estimated the country would no longer need Russian gas within 18 months, following an earlier prediction that it could take until 2025.

Italy is one of Europe’s biggest users and importers of natural gas, importing 90 percent of its gas supply with 45 percent of that coming from Russia – up from 27 percent ten years ago.

Italy now imports 29 billion cubic metres of Russian gas a year, which Cingolani said in March “must be replaced” – but he didn’t specify with what.

Analysts have said there are “a lot of questions” about how helpful Italy’s gas deal with Algeria will be.

Despite its vast natural gas reserves, Algeria is already exporting at close to full capacity.

Draghi repeated his strong support for EU sanctions on Moscow last week, including a proposed ban on imports of Russian oil, although this is currently being blocked by Hungary.

“We must continue to keep up the pressure on Russia through sanctions, because we must bring Moscow to the negotiating table,” he said.

But for now, Italian energy giant Eni says it plans to pay for Russian gas supplies in rubles, meeting a demand from Vladimir Putin.

It was not immediately clear whether the plan would fall foul of European Union sanctions, although Eni said it was “not incompatible”.

The company said its decision to open the accounts was “taken in compliance with the current international sanctions framework” and that Italian authorities had been informed.

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