Italy announces aid package to counter soaring energy prices – Investing NewsEverything

Rome, Nov 12 (IANS) The Italian government has unveiled a 9.1-billion-euro package aimed at helping businesses and struggling families deal with skyrocketing energy costs.

Announcing the plan on Friday, Prime Minister Giorgia Meloni said it would provide an “immediate response” to needs created by higher energy bills, reports Xinhua news agency.

According to provisional data from Italy’s National Statistics Institute (ISTAT), energy costs in the country in October were 73.2 per cent higher than a year earlier.

Global energy prices began climbing in February, after the start of the Russia-Ukraine war.

Russia has since cut off most of its supply of to European Union member states, including Italy.

Italy is particularly vulnerable to fluxes in energy prices, since it relies on energy imports for three-quarters of its total energy consumption.

Before the war in Ukraine, Russia was Italy’s single largest energy supplier, accounting for 40 per cent of the total natural gas it consumed. That figure is now down to 15 per cent, and is declining.

Italy currently produces just 5 per cent of its natural gas needs domestically.

The new aid package, one of the first major pieces of legislation from the newly-installed Meloni government, follows a series of similar aid packages passed by the government of Mario Draghi.

According to media reports, Draghi’s packages totaled around 66 billion euros.

In her remarks to reporters on Friday, Meloni said the new decree “extends the existing measures … and adds new measures”.

The package includes tax credits against energy expenditures for businesses in energy-intensive industries, and it also slashes taxes on fuel distribution, a measure expected to lower the price at the gasoline pump by around 0.3 euro per liter.

The terms will remain in force at least until the end of the year, Meloni said.

A new measure will allow businesses to split their energy bills into as many as 36 installments, and energy companies will be protected against potential default by government guarantees.

Previous measures allowing GSE, the state energy services company, to sell natural gas with a maximum price cap will be extended to March 31, 2023.

Meloni also gave more details of a plan to authorize offshore drilling in gas fields over the next 10 years, offering most of the natural gas produced to companies in energy-intensive sectors such as glass, ceramic, paper, iron, and steel producers at capped prices.

Before the Ukraine war, that proposal had been opposed by environmental groups concerned over the impact of offshore drilling near Italy’s coastlines.

–IANS