Italy ends fuel excise cut as oil prices ease, full tank costs €3 more

The decision

Italy's government has decided not to renew the excise duty cut on petrol and diesel, which expired at midnight on 3 July 2026. The reduction, worth 6.1 euro cents per litre including VAT, had been in place since March, when the Iran-US conflict sent oil prices soaring. The measure was last extended by a decree on 5 June, covering the period from 7 June to 3 July. The government said the cut had cost public coffers around €2 billion, financed mostly through extra VAT revenue.

We decided not to extend the excise cut, since fuel costs have been falling for over 20 days.

Price impact

With the cut gone, the average self-service price for petrol on ordinary roads rises to €1.86 per litre and to €1.95 on motorways. Diesel climbs to €1.94 on ordinary roads and to €2.02 on motorways, according to consumer group Codacons. A 50-litre fill-up will cost an extra €3.05. The last official survey by the business ministry on 3 July had petrol at €1.803 and diesel at €1.882 per litre on the ordinary network.

Without the excise cut, the average diesel price rises to €1.94 per litre on ordinary roads and €2.02 on motorways.

Government rationale

Minister of Enterprises and Made in Italy Adolfo Urso pointed to a steady decline in pump prices over the past three weeks and to EU recommendations against prolonged subsidies. Brent crude, the European benchmark, has dropped from $95 a barrel in early June to around $70, a decline of roughly 25%. Citi analysts, cited by Bloomberg, see Brent possibly falling to $60 if the Hormuz truce holds. The government argues that the market is correcting on its own, making the costly excise cut unnecessary.

Consumer backlash

Consumer associations reacted sharply. Codacons called the end of the cut a "sting" for motorists, especially ahead of the weekend. The National Consumers Union demanded at least a renewal of the minimum 5-cent discount, accusing the government of failing to strengthen antitrust powers against speculative pricing. The same group acknowledged, however, that Urso had pressed oil companies to lower list prices more quickly.

Geopolitical wildcard

Urso stressed that the decision is not irreversible. The stability of fuel prices remains tied to the security of navigation in the Strait of Hormuz, a critical chokepoint for global crude shipments. Negotiations to fully reopen the strait are ongoing.

We are always ready to implement further measures if the ongoing negotiations do not have positive consequences for navigation in the Strait of Hormuz.