Italy extends fuel tax cuts as energy costs continue to rise

Italy has approved a three-week extension of reduced excise duties on fuel, as the government seeks to ease the burden of rising energy costs on households and businesses.

The latest measure places greater emphasis on diesel, with authorities maintaining a €0.20 per litre tax cut, while reducing the petrol duty discount to €0.05 per litre. Officials said the adjustment reflects the sharper increase in diesel prices compared to petrol.

Prime Minister Giorgia Meloni noted that diesel prices have surged significantly more than petrol in recent months, prompting the targeted approach.

The government has already spent around €700 million to support fuel price reductions over a period of just over 40 days, as the economy faces pressure from global energy market volatility linked to geopolitical tensions.

Recent data from ISTAT showed consumer inflation rising by nearly 3% year-on-year in April, underlining the continued strain on living costs.

Alongside the fuel measures, the cabinet approved a separate long-term plan to invest up to €10 billion in housing projects aimed at low-income residents, with the goal of delivering around 100,000 homes over the next decade.

Meanwhile, Economy Minister Giancarlo Giorgetti reiterated calls for the European Union to allow greater budget flexibility to help member states manage energy-related expenses.

Italian officials argue that similar leeway granted for defence spending should also be extended to address the ongoing energy crisis, as governments across Europe continue to grapple with rising costs and economic uncertainty.