- Italy under pressure to curb energy costs, continue deficit cuts
- Measures to be effective until end-August
- EU, IMF criticised cut on excise duties
ROME, July 27 (Reuters) - Italy's cabinet will adopt new measures to curb soaring fuel prices, government officials and a senior lawmaker said on Monday, as concerns mount over the fiscal impact of such moves.
The rise in energy and consumer prices due to the war in the Middle East has been a major headache for the Italian government, which is trying to safeguard households' purchasing power and energy-intensive industries while keeping state finances in check.
Government sources told Reuters the cabinet would meet later on Monday to discuss a new set of measures focusing on diesel prices, with further action expected on August 4.
Without specifying the timeframe for the new measures, Massimo Garavaglia, head of the finance committee at the upper house of parliament, told reporters in Milan that "the government will take action to ensure that prices remain below the key threshold of €2 for both" diesel and gasoline.
"We will now be making some adjustments to excise duties to ensure a smooth start to the holidays for all Italians. Then, as always, we will monitor the situation," he said.
Italy introduced a temporary cut in excise duties on diesel and petrol in March in response to the energy shock triggered by the Israel-Iran conflict.
The measure was extended several times, and progressively scaled back, until it expired on July 3, at a cost to taxpayers of almost €2 billion ($2.28 billion) when also including tax breaks for truck drivers.
Both the European Commission and the IMF criticised the excise duty cut, saying Italy should have applied more targeted measures to shield the most vulnerable households, limiting the impact on Italy's strained budget.
The industry ministry said in a statement on Monday that the average price of fuel at self-service stations across Italy's road network is €1.982 per litre for petrol and €2.185 for diesel, up from €1.803 and €1.882, respectively, on July 3. Prices on the motorway network are even higher and exceed €2 euros for both fuels.
($1 = 0.8767 euros)
Reporting by Giuseppe Fonte, editing by Andrei Khalip
Source: Reuters