Italy's Prime Minister Meloni reduces excise duties to ease fuel prices as a vote on judicial reform approaches.

Italy has reduced fuel excise duties on Wednesday as part of efforts to assist families and businesses facing increased energy costs due to the ongoing conflict in the Middle East. This energy crisis presents a challenge for Prime Minister Giorgia Meloni, who is gearing up for a crucial political trial with the upcoming votes on March 22-23 regarding a controversial government plan to reform the judiciary.

"We are decreasing the fuel price by 25 cents per litre, for everyone," Meloni commented to RAI TG1 news following the cabinet's approval of the decree implementing these measures. The main opposition party, the Democratic Party, criticized the government's action as a delayed reaction to the energy crisis, suggesting it mainly serves to bolster support ahead of the upcoming vote. Meloni's right-wing coalition is advocating for a "yes" vote in the upcoming referendum, while the center-left opposition is pushing for a "no" vote. Officials indicated that the reduced excise duties would remain effective for approximately 20 days. Additionally, the government plans to allocate 608 million euros ($697.86 million) in tax breaks to assist trucking companies in purchasing diesel, as outlined in a draft of the decree reviewed by Reuters.

Earlier, Deputy Prime Minister Matteo Salvini met with representatives from major petrol station networks in Milan and cautioned that the government was prepared to raise taxes on companies benefiting unreasonably from the energy crisis. "The companies assured us they are not speculating, but we will be monitoring the situation," he stated. Last month, Italy raised its IRAP corporate tax on energy companies to support measures aimed at reducing wholesale electricity prices, a move projected to generate around 1 billion euros for the state by 2028. The decree approved on Wednesday also allows for reporting companies suspected of abruptly increasing fuel prices to judicial authorities, according to the draft. Salvini, who leads the ruling hard-right League party, expressed the goal of keeping diesel prices below 1.90 euros ($2.19) per litre, down from the current 2.10 euros. Meloni is also in discussions with EU counterparts to pause the ETS carbon-permit system to alleviate energy costs. The Emissions Trading System, the EU's primary climate policy, requires power plants and industries to purchase CO2 permits when they emit pollution, capping the number of permits available in the market to gradually reduce emissions over time.