Italy extends energy bill discount and petrol tax cuts

AFP/The Local
AFP/The Local - [email protected] • 3 May, 2022 Updated Tue 3 May 2022 16:16 CEST
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The Italian government is expected to extend funding for energy bills and discounts on fuel taxes. Photo by Ina FASSBENDER / AFP

The Italian government has outlined plans to lessen the impact of the cost of living crisis, from extending energy bill discounts to cuts on fuel excise duties.


Italy approved a much-awaited set of financial measures on Monday to curb the soaring cost of living, driven by energy and fuel price hikes.

The stimulus package drawn up by Italy's prime minister Mario Draghi is aimed at combatting the knock-on effects of the conflict in Ukraine, reportedly worth around 14 billion euros - double what was previously budgeted for.

READ ALSO: How to save money on your fuel in Italy

Energy bill payers will be able to take advantage of a government discount on gas and electricity bills for a further three months, as the government has extended the current ‘Social bonus for electricity and gas’ or 'Bonus sociale energia elettrica e gas' to the third quarter of 2022.


Energy bills have soared over the past year fuelled by the surging cost of gas imports, hitting a record in January. This has only been made worse since Russia invaded Ukraine, as Italy is more dependent on Russian imports of natural gas for energy than most of its European neighbours and produces very little of it within the country.

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

In response, Italian authorities passed a new law in March for the second quarter of the year, aimed at lowering utility bills for those on lower incomes.

The bonus’s eligibility criteria had also been amended so that all homeowners with an 'ISEE', an indicator of household wealth, (Indicatore della Situazione Economica Equivalente) lower than €12,000 can benefit from the energy bill discount.

That marked an increase on the previous ISEE limit of around €8,000, meaning more bill payers can offset their energy bills - now, until September 2022.


The government has also extended its previous cuts to fuel excise duties to July 8th. The move had been introduced in late March to put a brake on soaring pump prices, when petrol surged to highs of over €2 per litre.

In this case, the excise duty will fall to "zero euros per cubic metre" and there will be a reduction in VAT to 5 percent - previously 22 percent - while a cut to the price of methane is also expected.

The financial moves are included in the government’s new energy and investment decree (decreto energia e investimenti), which is yet to be published in its final version.

Draghi said the package is intended to "protect the purchasing power of families and the most vulnerable, and companies’ production capacity".

"The measures will fight the higher cost of living. The price spiral depends on a large part on the cost of energy," he added.

"And that means that is a temporary situation which has to be confronted with exceptional instruments."

Also included in the upcoming decree is a cash bonus of €200 for around 28 million Italians with annual earnings of less than €35,000 for both workers and pensioners, in a bid to curb the rising cost of living.


In other measures, Italian authorities extended the building 'superbonus 110', to give homeowners more time to claim government aid for delayed renovation works.

Since Russia invaded Ukraine, the Italian government has already set aside some €15.5 billion for various economic relief measures. With the latest round of financial help, the country is expected to inject a total of two percentage points of GDP into the economy by the end of 2022.



AFP/The Local 2022/05/03 16:16

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