Italy extends energy bill discount and petrol tax cuts

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.

The French government has published guidelines on what to do if you are struggling to pay your energy bills.
The Italian government is expected to extend funding for energy bills and discounts on fuel taxes. Photo by Ina FASSBENDER / AFP

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.

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Lights out: How Christmas in Italy will be different this year

As the European energy crisis continues, some cities in Italy have chosen to save on electricity by downsizing regular Christmas displays, thus making this year’s festivities a little less flashy.

Lights out: How Christmas in Italy will be different this year

With less than a month to go until the Christmas holidays, many might be rejoicing at the prospect of finally seeing their cities lit up by dazzling Christmas displays.

But, as the European energy crisis shows no sign of abating and many cities across the boot keep struggling to square their accounts in the face of soaring bills, some residents may be disappointed to know that this year’s festive decorations might differ from the norm.

Milan, Italy’s economic capital, was one of the very first Italian cities to announce it would significantly reduce Christmas displays to save on energy.

READ ALSO: Lights off and home working: Milan’s new energy-saving plan for winter 

After reports emerged in early October that the city would end up spending a whopping €130 million on energy bills alone in 2022, Milan’s mayor, Giuseppe Sala, was quick to warn residents that Christmas decorations would be “restrained” and operate “for shorter periods of time”.

And, it wasn’t long before Sala made good on his promises. 

Earlier this month, the city’s authorities agreed on putting up decorations and light displays on December 7th (that is over two weeks after the usual date) and taking them down on January 6th instead of late January. 

Christmas lights in the streets of central Milan

Christmas lights in Milan will be switched on on December 7th, that is over two weeks after the usual switch-on date. Photo by Miguel MEDINA / AFP

Also, while in previous years Milan’s city centre was illuminated overnight, this year’s Christmas lights will be switched on at 4pm and switched off at midnight. 

But, while Milan residents might be slightly dissatisfied with the new arrangements, they sure have little to complain about when compared to Rome residents. 

It’ll be a dark Christmas (literally and, perhaps, even figuratively) for most areas of the Eternal City and not merely because of the current energy crisis. 

READ ALSO: Energy crisis: The Italians reviving ‘nonna’s’ traditions to keep costs down

The city’s tender for this year’s Christmas lights contract received no bids before its deadline on October 27th, which means that, in many neighbourhoods, festive decorations will be largely left to the goodwill and financial means of the residents.

So while the popular Piazza di Spagna, Porta Pia and Via Alessandria will light up over the holiday season thanks to private funding, the San Giovanni and Tuscolano neighbourhoods and Via Cola di Rienzo are currently expected to remain au naturel.

Christmas light in a street in Rome

Many areas of the capital, Rome, will be without lights this year due to lack of funding. Photo by Tiziana FABI / AFP

Things will generally be better in Venice and Florence, where local authorities have recently chosen to maintain their usual arrangements, the only exception being the replacement of regular lights with energy-efficient, LED ones. 

So, while the lighting might be a little softer and displays might not be as remarkable as in previous years, both cities should be able to deal with late-December energy bills more comfortably than they would have had to do otherwise.

READ ALSO: EXPLAINED: How Italy has avoided a huge hike in gas prices – for now 

Having said that, not all Italian cities have decided to resize their Christmas offerings on the back of eye-watering electricity prices. 

Naples, which has long been known for the extravagance of its Christmas and New Year celebrations, has seemingly chosen to turn a blind eye to the energy crisis and will allocate as much as €1.5 million (that’s €150,000 to each one of the ten local municipalities) to this year’s displays.

Unsurprisingly, the comune’s decision has been drawing widespread criticism, with many local political figures pointing out that part, if not most, of the above-mentioned amount should have been spent elsewhere, perhaps in the form of a one-off ‘Christmas bonus’ for struggling households and businesses.

The available money should have been used to “turn off the crisis and light up people’s hearts”, city councillors Antonio Culiers and Francesco Flores said in a joint statement earlier this month.