The Council of Ministers, convened on Monday, July 27, approved the decree-law containing "urgent provisions regarding oil prices related to the further crisis in international markets and regarding Ilva," giving the green light to a new intervention to contain fuel prices. The measure, defined by the government as a "bridge" measure, introduces a17 cents per litre on diesel alone, including excise duties and VAT, which will come into force at midnight on July 28 and will remain valid until August 6. The measure does not concern petrol and represents a temporary intervention pending verification of the trend in international energy prices and the available resources deriving from the additional VAT revenue.
Giorgetti: "The cost is €125 million. A new update on the situation will be announced on August 4th."
At the end of the Council of Ministers it was the Economy Minister Giancarlo Giorgetti to illustrate the measure. "A discount is expected on diesel fuel, and only diesel fuel, for a total excise duty and VAT equivalent of 17 cents until August 6," explained the Minister of Economy and Finance, specifying that the overall cost of the operation is approximately 125 million euros.
Giorgetti also announced that The Council of Ministers will meet again on August 4th To assess the evolving international situation, oil price trends, and decide whether to extend or modify the measures in effect after August 6th. At the same time, the extension of the subsidy for road haulers and the continuation of the tax credit for the agricultural sector were confirmed. The minister also ruled out any changes to tobacco taxation: "We have not intervened on tobacco excise duties“, he clarified, denying the rumours that had been circulating in the hours preceding the Council of Ministers.
How much will the price of diesel drop?
The move comes at a time of heightened tension over pump prices. According to surveys released in the last few hours, self-service diesel had reached a national average of €2,185 per liter. the highest level since March 18, 2022 and very close to the all-time high of 2,229 euros set after the Russian invasion of Ukraine. Gasoline, on the other hand, had surpassed 1,982 euros per liter, its highest since October 2023.
With the discount announced by the government, the average price of diesel could therefore theoretically drop to around 2,015 euros per liter, returning below the €2,02 threshold, although the final effect will vary depending on the commercial policies of individual operators and the evolution of international crude oil prices. For a driver filling up a 50-liter tank, the maximum benefit can reach €8,50 per fill-up, while for a 60-liter tank, the savings rise to €10,20.
A bridging decree pending the introduction of mobile excise duties
The government's approved measure represents only the first step in a strategy to combat fuel prices. The government intends to subsequently implement the mobile excise tax mechanism, which would allow the additional VAT revenue generated by rising fuel prices to be used to finance further tax cuts without impacting public finances. The verification will be carried out in the first days of August, when the Ministry of Economy has the definitive data relating to VAT collections for the month of July.
The decree approved by the Council of Ministers therefore offers an immediate response to the diesel price surge, but leaves open the possibility of further interventions should tensions in the energy markets continue in the coming weeks. For the government, this represents a delicate balance between the need to support families and businesses and the need to preserve public finances at a time still characterized by strong volatility in international markets.
