Italy Prepares Five-Day Extension on Diesel Tax Cut Before Shift to Targeted Aid

Temporary bridge funded by VAT receipts

The Italian government is preparing an interministerial decree from the Ministry of Economy and the Ministry of the Environment and Energy Security to extend the current diesel price discount. The provision will prolong the reduction of 17 cents per litre on diesel fuel taxes, consisting of 14 cents in excise duties and 3 cents in value-added tax, from its scheduled expiration on 5 September until 10 September. Treasury technicians estimate the five-day bridge will require between 50 million and 60 million euros, financed entirely through surplus VAT revenue generated by recent retail price increases. This approach follows an earlier allocation of 20.8 million euros in surplus revenue that financed a two-day discount at an estimated operational cost of 10.4 million euros per day.

Fuel costs climb amid international pressure

The stopgap extension responds to rising pump prices driven by crude market tensions and the ongoing conflict between the United States and Iran in the Persian Gulf. Price observatory figures released on 3 September by the Ministry of Enterprises and Made in Italy showed national average self-service fuel prices reaching 2.039 euros per litre for petrol and 2.147 euros per litre for diesel on ordinary roads. On motorway routes, average self-service prices reached 2.124 euros per litre for petrol and 2.221 euros per litre for diesel. Over the same trading period, Brent crude reached 96.88 dollars per barrel and WTI rose to approximately 91 dollars per barrel, while Amsterdam TTF gas fell 2.64 percent to 71.68 euros per megawatt-hour. Massimiliano Dona, president of the National Consumers Union, stated that filling a 50-litre tank rose in cost by 85 cents in two days for both petrol and diesel on regular roads, and by 1 euro for petrol on motorways.

Shift from universal cuts to selective aid

The forthcoming expiration marks the end of broad universal tax cuts, which cost the Italian state approximately 2.6 billion euros over roughly six months. Government officials have argued that blanket cuts disproportionately benefit higher-income citizens who consume larger volumes of fuel. Following a Council of Ministers meeting on 26 August, which originally authorized the 17-cent cut using advance tax payments on energy dividends, Deputy Prime Minister Antonio Tajani confirmed the planned transition to targeted measures.

structural but targeted aid that can help especially the weakest segments, the middle class, and help businesses.

Cabinet negotiations on targeted measures

Ministers plan to present the definitive aid package at a Council of Ministers session early next week, after institutional commitments and celebrations in Bari regarding the longevity record of Giorgia Meloni's government prevented an earlier meeting. Proposed interventions include company-issued fuel vouchers distributed through workplace fringe benefits with offsetting tax credits for employers, adjustments to the "Dedicata a te" purchasing card for pensioners, and extended deadlines for road hauliers to offset tax credits against fiscal liabilities. Coalition negotiations involve calls from Lega to expand support beyond payroll employees to include self-employed workers and sole proprietors, while adjusting standard ISEE wealth indicators. Majority parties are also deliberating an income ceiling near 50,000 euros, while technical evaluations continue regarding potential surplus-profit taxes on energy producers despite corporate objections about capital investments.