The Council of Ministers has granted a further extension to the excise duty cut until 5 September

The Council of Ministers has approved a ten-day extension to the excise duty cut that was due to expire at midnight tonight. The measure, as sources at Palazzo Chigi had indicated the day before, therefore extends the measures already in place to tackle high fuel prices – relating solely to diesel – until 5 September, so as to allow the government to work on a more targeted intervention at the start of next month. Today’s measure will therefore not be the definitive solution, but will serve to buy the time needed to finalise a structural intervention – still under consideration – designed to support the most vulnerable groups or specific categories. The government’s new approach – to focus measures on the most vulnerable sections of the population – emerged yesterday during a meeting between Prime Minister Giorgia Meloni, the two Deputy Prime Ministers Antonio Tajani and Matteo Salvini, the leader of Noi Moderati Maurizio Lupi, and the Minister for the Economy Giancarlo Giorgetti. However, the issue of funding remains. So far, the approach has been across the board: 17 cents per litre on diesel, 14 from excise duty and 3 from VAT, introduced by the decree at the end of July, extended by the Council of Ministers on 4 August until the 25th – with 245 million scraped together from the ministries’ budgets – and then until the 26th by the interministerial decree signed on 20 August, which recovers the additional VAT revenue through the mechanism of variable excise duties. The expenditure amounts to around ten million a day, totalling over two billion spent from March to the present day.

The issue of coverage has therefore been postponed. One option on the table is a tax on oil companies’ windfall profits; however, Meloni – partly due to opposition from Forza Italia – would prefer this to be implemented at EU level, whilst Salvini insists on taxes on banks. Just yesterday, the Irish Presidency announced that the discussion will be scheduled.