If you noticed a sudden drop in the price of fuel at the pump in Italy today or yesterday, it’s because the government has temporarily cut taxes on fuel to offset soaring costs for motorists.
Fuel prices in Italy, as elsewhere, have risen sharply since late February, when US and Israeli strikes on Iran pushed oil toward $100 a barrel and raised fears of supply disruption through the Strait of Hormuz.
READ ALSO: Italy slashes fuel taxes as diesel hits €2 a litre
Italian official figures put self-service diesel at €2.07 a litre and petrol at €1.84 on March 15th-16th, with diesel at its highest price in over three years.
In response, Italy’s government approved an emergency decree on Wednesday cutting excise duties on fuel.
"We are cutting fuel prices by 25 cents per litre for all," Prime Minister Giorgia Meloni announced on Rai TG1.
Consumer group Codacons calculates the actual reduction at the pump, including VAT, will be closer to 30 cents — a saving of around €15 on a 50-litre tank, enough to bring diesel back to roughly pre-conflict levels.
The reduction should filter through to pumps by the end of this week, though officials warned on Thursday it may take another 24 to 48 hours to be seen everywhere.
To ensure companies pass the savings on to consumers, Italy’s Guardia di Finanza has launched checks after the price watchdog found pumps that hadn't yet lowered prices.
READ ALSO: How war in Iran is driving up fuel costs in Italy
Oil companies must also now report daily recommended prices to the ministry or face fines of 0.1 percent of turnover.
Deputy Prime Minister Matteo Salvini on Thursday asked them to keep diesel below €1.90 a litre, saying it was a "moral obligation", after a formal price cap was ruled out for competition reasons.
The measures only last 20 days, and Codacons warned that prices will rise sharply again once the cut expires. Drops in oil prices also tend to reach drivers only slowly, as Italian motorists have seen before.
There's another reason the prices were so high. From January 1st, excise duties on diesel were raised to match those on petrol, ending decades of cheaper diesel at the pump — so Wednesday's cut partially reverses a change the government itself introduced at the start of the year.
Our guide on how to save money on fuel in Italy has some practical tips on keeping costs down in the meantime.
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