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Italy unveils a new €14bn package to cope with surging energy prices

The Italian government has approved a decree-law deploying €14bn of stimulus, including measures to reduce the cost of energy: the tax credit for businesses has been strengthened and extended to the third quarter of 2022, while social bonuses related to electricity, gas and water bills granted to vulnerable households have been made automatic and retroactive. Italy has extended until 8 July 2022 a cut of €25c/l on fuel prices at the pump and extended the cut in fuel excise duties to methane (excise duty cut to zero and VAT reduced to 5%). Finally, it will simplify the authorisation procedures for new power plants and aims to enhance the country's energy supply: Italy, which aims to cut its reliance on Russia gas by mid-2024, also intends to extend the life of four coal-fired power plants for up to two years and accelerate the roll-out of renewables. About €6bn of the new recovery plan will be funded by taxes on the "extra" profits of energy companies due to rising oil and gas prices. Around €15.5bn have been already budgeted since January 2022 to contain rising energy price.

In April 2022, the Italian energy regulator ARERA announced a 10% decrease in electricity and gas prices for households in the second quarter of 2022. This is the first drop in 18 months for electricity prices and in 21 months for gas prices, thanks to lower commodity prices and to earlier measures to curb the surge in energy bills, especially gas. Despite the announced decline in the second quarter of 2022, the average electricity bill for a typical household will be 83% higher in the 1 July 2021-30 June 2022 year, compared with the same period of 2020-2021, at €948; the average residential gas bill will be 71% higher, at €1,652.

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