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ENERGY

Italy will ‘soon’ stop buying gas from Russia, says minister

Italy is ethically obliged to stop buying Russian gas as the payments are funding the Ukraine war, said the country's Ecological Transition Minister.

Italy will 'soon' stop buying gas from Russia, says minister
Photo by BARBARA SAX / AFP.

“I think that we will have to stop supplies of gas from Russia soon for ethical reasons,” minister Roberto Cingolani told Italy’s La Stampa newspaper.

Cingolani has just returned from a two-day trip to Angola and Congo Republic seeking energy deals as Italy scrambles to reduce its dependency on Russia, which provides about 45 percent of Italy’s gas supply.

READ ALSO: ‘A waste of time’: Talks with Putin go nowhere, says Italy’s PM

“We are diversifying our sources with great speed,” he said.

“It is clear that all of Europe is heavily dependent on Russia for gas, and this has been a major geopolitical mistake made over the past 20 years,” he said.

“It is useless to think that we can solve it in a month. From a certain point of view, however, this money is a lot… we are indirectly financing the war.”

Cingolani predicted the country would no longer need Russian gas within 18 months.

Just two weeks earlier, he had said he expected it to take up to three years to wean the country off Russia’s gas supply.

“By the second half of next year we will really begin to have an almost complete independence,” he told La Stampa.

Italy is one of Europe’s biggest consumers of gas, which currently represents 42 percent of its energy consumption, and it imports 95 percent of the gas it uses.

The foray into Angola and the Congo Republic follows the clinching of gas agreements with Algeria and Egypt in recent weeks.

The government also says it will soon sign off on its so-called “operation thermostat”, which is expected to mean the public sector is forced to use less heating and air conditioning, and the general public will be called on to follow suit.

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ENERGY

Which households in Italy will benefit from falling gas prices?

Gas prices are returning to lower levels but which Italian households will see the benefits on their utility bill? Here’s what you need to know.

Which households in Italy will benefit from falling gas prices?

Italy’s energy regulator Arera announced on Thursday that gas bills had dropped by an average 34 percent in January, marking a change in trend after increases recorded in December and November.

Arera said the fall in prices was largely driven by lower wholesale gas prices, but was also aided by “lower supply costs” and the government’s three-month suspension of gas-related standing charges.

But not everyone in the country will feel the effects of the price change.

The decrease reported by Arera will benefit customers on a ‘protected’ or maggior tutela contract, where rates are directly determined by Arera as opposed to private suppliers – this applies to approximately 41.5 percent of Italian households.

READ ALSO: EXPLAINED: When can you turn your heating on in Italy this winter?

For customers with private suppliers, who are instead on mercato libero (free market) contracts, any change in price will depend on the contract itself, particularly on whether it’s based on a fixed or variable rate.

Gas prices within the mercato libero (or ‘free market’) are determined by private companies, so variations in Arera’s tariffs do not directly affect these contracts.

Gas stove

Variations in Arera’s gas tariffs do not directly affect free market clients. Photo by Ida Marie ODGAARD / Ritzau SCANPIX / AFP

Some ‘hybrid’ contracts from private suppliers index their gas prices to Arera’s rates, and customers with this type of contract are likely to see a reduction in fees.

That said, the European market registered comparatively low gas prices in January – gas cost an average of 0.74 euros per cubic metre last month, down from the average 1.25 recorded in December. This may very well result in lower gas bills for free market customers in Italy.

But overall, despite January’s decrease, gas tariffs remain much higher than they were before the start of the energy crisis.

READ ALSO: Heating homes: What are Italy’s rules on using fires and wood-burners?

The average Italian household on a contratto tutelato will still spend 1,769 euros on gas bills alone in the next 12 months (from February 2022 to January 2023) – a whopping 36-percent increase against the same period of time last year.

National consumer group UNC warned against the optimism expressed by several government figures on Thursday, saying while “families may now take a breather”, bills are still “unsustainable for too many Italians”. 

UNC also urged the government to extend the three-month suspension of standing charges for another three months when it expires at the end of March.

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