Meloni considers cutting fuel excise duty and seeks more flexibility from EU

The Italian government is considering the possibility of lowering taxes on petrol and diesel, as fuel prices continue to weigh on consumers’ finances. Prime Minister Giorgia Meloni said the executive is ready to intervene again to ease this burden.

After the end of the Med9 Mediterranean countries summit, held in Split, Croatia, Meloni said the government is considering using around 160 million euros to ease fuel costs.

According to Italian media, no decision has yet been made on whether the funds will be used immediately or kept until the end of the measures currently in force to limit prices.

The planned scheme would rely on using extra VAT revenue, generated as a result of price increases, to finance the reduction in excise duty.

Meanwhile, the Italian prime minister has asked the European Commission for a more flexible approach in implementing budget rules. She argues that inflation has brought the Italian state billions of euros in additional spending, which did not come as a result of new government decisions.

Among them, Meloni singled out automatic increases in pensions, social benefits and the costs of public projects.

European sources say that on 8 October the Commission is expected to approve the activation of the national flexibility clause, requested by Italy for energy and defence. The issue is expected to be examined further at the meeting of EU finance ministers in November.

However, Brussels has made clear that the rules in force provide for higher-than-expected inflation to be taken into account when assessing public spending. This, according to the Commission, does not automatically give Italy the right to increase spending.

The main debate concerns Rome’s request to use extra revenue created by inflation to finance measures against the energy crisis, a practice that European rules do not automatically allow.

Meloni said she has discussed this issue with European Commission President Ursula von der Leyen, adding that Greece has expressed similar concerns.