Italy is considering prolonging a temporary reduction in fuel excise duties beyond the current May 1 end date, Prime Minister Giorgia Meloni said on Tuesday. The potential extension is under review and, according to Meloni, could be shorter in length than prior measures.
"We are assessing a further extension, which might be shorter than the previous ones," Meloni told reporters after a cabinet meeting.
The measure in place has cost the government around 700 million euros and covered reductions in excise duties on petrol and diesel for just over 40 days up to May 1. Meloni indicated that any new cut being discussed might have a stronger effect on diesel prices than on petrol.
In addition to fuel tax relief, the government has earmarked almost 1 billion euros, equivalent to $1.17 billion, to continue and strengthen tax breaks designed to encourage employers to take on staff. These steps are part of a broader package intended to ease the burden of rising energy costs on families and businesses.
Italy's high dependence on imported energy leaves the country particularly exposed to disruptions in supply, Meloni warned, noting the risk posed by the U.S./Israeli conflict with Iran.
On the European policy front, Meloni urged the European Commission to allow member states to address energy cost pressures by using budget flexibility that is explicitly allocated for defence and security spending. Under the EU's National escape clause, countries may exceed the bloc's budget deficit limits in cases of exceptionally adverse economic circumstances or to increase defence spending.
Specifically, the budget flexibility for defence spending is available for four years between 2025 and 2028, and any related deficit increase must not exceed 1.5% of national output per year.
The government's actions combine direct fiscal relief at the pump with measures to support employment. Officials are balancing the immediate objective of reducing energy costs for households and companies against the fiscal implications of extending excise duty cuts and the conditions governing EU budget rules.