By Elisa Anzolin and Giuseppe Fonte MILAN/ROME, March 18 (Reuters) - Italy will likely announce measures to cut fuel prices later on Wednesday, Deputy Prime Minister Matteo Salvini said, as the
Italy PM Meloni cuts excise duties to soften fuel prices as judicial reform vote looms
Government Measures and Political Context
By Giuseppe Fonte, Francesca Piscioneri and Elisa Anzolin
Excise Duty Cuts and Energy Crisis Response
ROME/MILAN, March 18 (Reuters) - Italy on Wednesday cut excise duties on fuels as part of measures to help families and businesses cope with higher energy costs triggered by the war in the Middle East.
The energy crisis is a headache for Prime Minister Giorgia Meloni, who also faces a key political test when Italians vote on March 22-23 on a highly divisive government plan to reform the judiciary.
Details of the Fuel Price Reduction
"We're cutting the fuel price by 25 cents per litre, for all," Meloni told RAI TG1 news after the cabinet approved a decree enacting the measures.
Opposition Reaction
In a statement, the main opposition Democratic Party called the government move a late response to the energy shock and said it was mainly aimed at beefing up support ahead of the vote.
Political Stakes and Referendum
Meloni's right-wing coalition is backing the "yes" vote at the forthcoming referendum, while the centre-left opposition is supporting the "no" camp.
Duration and Financial Support Measures
Officials said the lower excise duties would stay in place for around 20 days. As part of the package, the government plans to spend 608 million euros ($697.86 million) on tax breaks to help trucking companies buy diesel, a draft of the decree seen by Reuters showed.
Industry Oversight and Taxation
Government Warnings to Fuel Companies
Earlier in the day, Deputy Prime Minister Matteo Salvini met with representatives of the main petrol station networks in Milan, warning the government was ready to hike taxes on firms taking undue benefits from the energy crisis.
"The companies have told us that they aren't speculating, but of course we'll be checking," he said.
Corporate Tax Increase on Energy Firms
Italy last month increased its IRAP corporate tax on energy firms to help fund measures aimed at lowering wholesale electricity prices, a move that would yield state coffers around 1 billion euros through 2028.
Reporting and Judicial Measures
The decree approved on Wednesday paves the way for reporting companies alleged to have suddenly raised fuel prices to the judicial authorities, according to the draft.
Target Diesel Price
Salvini, who leads the co-ruling hard-right League party, said the aim was to keep the price of diesel below 1.90 euros ($2.19) per litre from 2.10 euros now.
EU Policy and Broader Energy Strategy
Lobbying for EU Carbon Scheme Freeze
Meloni is also lobbying EU peers to freeze the ETS carbon-permit scheme to soften energy bills.
Explanation of the Emissions Trading System
The Emissions Trading System, which is the EU's most important climate-change policy, forces power plants and industries to buy CO2 permits when they pollute, and caps the number of permits in the market, to curtail emissions over time.
($1 = 0.8687 euros)
(Additional reporting by Angelo Amante; Editing by Andrei Khalip, Nia Williams and Chris Reese)
