Italy Approves Emergency Decree to Slash Fuel Prices Amid Iran War Economic Strain

Italy's Cabinet approved a decree on March 18, 2026, to reduce fuel prices, responding directly to the surge in energy costs linked to the ongoing war involving Iran. The package includes a cut to excise duties, targeted tax credits for the fishing and road haulage sectors, and a commitment to further measures depending on outcomes at the upcoming European Council meeting. The total funds allocated for the temporary measures are estimated at under one billion euros. Prime Minister Giorgia Meloni, who was in Brussels on the same day, held a meeting with German Chancellor Friedrich Merz on the sidelines of European-level discussions.

Truck drivers and fishermen get targeted tax relief The decree introduces sector-specific support to cushion the blow of higher fuel costs on key industries. Minister of Agriculture Francesco Lollobrigida announced a 20 (%) — tax credit on fuels for the fishing sector as part of the package. Truck drivers are set to receive a , a measure that according to ANSA amounts to . Deputy Premier and Transport Minister Matteo Salvini framed the goal of the broader package as bringing diesel prices below €1.90 per litre. The government also indicated it would consider additional measures after the European Council meeting, signaling that the decree approved on March 18 may not be the final word on the issue. The measures are described as temporary, with the total outlay kept under one billion euros.

Opposition and consumer groups push for deeper excise cuts The decree drew immediate responses from opposition politicians and consumer advocates, who argued the government's measures did not go far enough. Elly Schlein, secretary of the Democratic Party, called on the government to use extra revenue generated by higher fuel prices to fund cuts to excise duties, framing it as a fiscally neutral way to provide relief to consumers. The consumer association Codacons went further, demanding that any excise duty cut amount to at least 20 cents per litre. The government's package does include a cut to excise duties, but the specific depth of that cut was not confirmed in available reporting. The gap between what the government approved and what opposition figures and consumer groups demanded is likely to remain a point of political contention as fuel prices continue to affect Italian households and businesses.

Iran war drives energy anxiety across European economies The US-Israeli military operation against Iran, known as Operation Epic Fury, began on February 28, 2026, and has created significant uncertainty in global energy markets, given Iran's role as a major oil producer. Italy, as a major fuel-importing economy, is particularly exposed to price volatility stemming from Middle Eastern conflicts. The Italian government under Prime Minister Giorgia Meloni has been in office since October 2022. The Italian government's decision to act through a cabinet decree reflects the speed with which rising fuel costs have become a political priority in Rome. The measures approved on March 18 are explicitly framed as temporary, with the government reserving the right to expand the package after consulting with European partners at the Council level. Meloni's meeting with Chancellor Friedrich Merz in Brussels on the same day as the cabinet vote suggests that Italy is also seeking to coordinate its response with key European allies. The combination of excise duty cuts, sector-specific tax credits, and the prospect of further action positions the government as responsive to the crisis while keeping fiscal commitments in check by capping total spending below one billion euros.

Fuel relief measures: government vs. opposition demands: Excise duty cut (before: Government: included in decree, depth unspecified, after: Codacons demand: at least 20 cents per litre); Funding approach (before: Government: dedicated temporary funds under €1 billion, after: Schlein (PD): use extra revenue from higher fuel prices); Diesel price target (before: Current prices above €1.90 per litre, after: Salvini goal: below €1.90 per litre)