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- October 22, 202618°
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- October 22, 202618°
Italy extends diesel tax cut to Sept. 5 after U.S.-Iran conflict
The Italian government has extended the diesel excise tax cut until Sept. 5. The reduction of approximately 17 euro cents per liter is expected to reduce public revenues by an estimated 130 million euros.
Italy’s Giorgia Meloni government has extended the diesel excise tax cut until Sept. 5 after rising oil prices increased fuel costs. The measure aims to limit the growing expenses faced by households and businesses.
The reduction will not apply to gasoline and will continue only for diesel at approximately 17 euro cents per liter. The extension is expected to result in an estimated 130 million euros in lost public revenues.
Fuel costs increase political pressure
Rising diesel prices have increased costs for transport companies and farmers that rely heavily on the fuel. Higher energy expenses have also increased pressure on Prime Minister Giorgia Meloni’s government, which is seeking to protect purchasing power and support economic growth.
The government has extended the fuel tax cut several times after the U.S.-Iran conflict that began in February pushed up crude oil prices. Under the latest decision, the tax benefit has been withdrawn for gasoline and limited to diesel.
Cost concerns grow ahead of parliamentary elections
Fuel prices also carry political significance ahead of next year’s parliamentary elections. Opposition parties accused the government of failing to adequately tackle the widening impact of the cost-of-living crisis. Business representatives warned that high fuel costs could weaken competitiveness.
Meloni’s office said that, once the current excise tax cuts expire, more targeted support for low-income households could be introduced instead of a broad tax reduction.
CNA estimates costs at 12 billion euros
The Italian Confederation of Crafts and Small and Medium-sized Enterprises (CNA) estimated that the period it described as the Iran war could cost the country approximately 12 billion euros. CNA said fuel, electricity and natural gas costs would increase by approximately 11.6 billion euros between March 1 and Aug. 31 compared with their levels before Feb. 28.
CNA’s calculations indicated that more than half of these additional costs would come from transportation expenses. The additional cost expected to arise from gasoline and diesel over the six-month period was estimated at approximately 5.8 billion euros.
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