Italian energy minister says fuel tax relief no longer sustainable, calls refiners meeting

Italy is running out of bandwidth to keep propping up local fuel consumption with special tax cuts, its energy minister has warned, as the government has pushed for alternative levers to help combat rising prices.

In an interview with local broadcaster Radio 24 on Sept. 24, Italian energy minister Gilberto Pichetto Fratin said the Italian state budget cannot keep up with spending €1 billion per month on emergency cuts to fuel excise duties, a measure originally introduced in March in response to the Middle East conflict.

"When we made the first intervention on excise duties, it was supposed to last 10-15 days. And unfortunately, that wasn't the case," Fratin said. "We need to find a different approach," he said.

Since the US-Iran conflict erupted late February, strategic stock releases and historic US diesel exports have helped soften the blow of lost Middle Eastern supplies.

However, persistent disruptions have pushed diesel prices to record highs in September, with the risk of significant upside if a US diesel export ban is imposed or further refinery outages occur.

Like many other European countries, Italy has repeatedly extended short-term tax breaks intended to shield consumers from soaring oil prices. Earlier this month, the government agreed to start tapering its diesel tax cut, with the view to phasing it out on Oct. 5.

In a separate statement on Sept. 25, Italian energy giant Eni credited the tax cuts with supporting its own commitment to cap its diesel and gasoline prices for 30 days — unveiling limits of €2.19/liter for diesel and € 1.99/liter for gasoline.

It described the move as a "gesture of solidarity" to partly absorb fuel price increases that had become "extremely burdensome for Italian households and businesses," blaming a string of European refinery closures for exacerbating shortages.

However, faced with mounting fiscal concerns ahead of the country's 2027 budget announcement in October, Fratin and Industry Minister Adolfo Urso have pushed for alternative mechanisms to address the fuel crisis.

According to local media, the ministers are due to meet with the country's oil refiners, including Sonatrach, Socar-IP, Iplom, Ludoil, Eni and Saras, on Oct. 8, with the view to discussing how their facilities can boost production. Italy is home to nine refineries and typically produces about 1.2 million barrels/day of refined products, making it a net exporter of diesel and gasoline, according to S&P Global Energy CERA.

The discussions come as more European leaders have called for coordinated EU action — with French President Emmanuel Macron calling for measures such as relaxed fuel quality standards and revised limits for biofuel blending, according to a letter addressed to European Commission President Ursula von Der Leyen this week.