ROME – The Italian government is considering a mechanism to recoup excess VAT revenue generated by rising fuel prices, effectively charging what officials are calling “speculators” to fund cuts in fuel excise duties. The potential measure is contained within a draft decree law, now expected to be reviewed by the Council of Ministers on Wednesday, March 11th, a day later than initially planned.
The proposed system aims to address growing public concern over escalating costs at the pump, fueled in part by the ongoing conflict in Iran and its impact on global oil markets. Prime Minister Giorgia Meloni acknowledged the government’s exploration of “mobile excise duties” on Sunday, stating that the mechanism was under study and had also been proposed by opposition parties.
According to sources, the government intends to utilize the additional VAT income – collected as fuel prices increase – to offset the cost of reducing excise taxes on gasoline and diesel. This approach seeks to mitigate the financial burden on consumers without directly impacting state revenues. The concept, described by some officials as a form of “economic counter-penalty,” is intended to discourage price gouging by fuel companies.
While the legal framework for such a measure already exists – stemming from a 2023 decree – implementing the system requires formal approval through a Council of Ministers decree. Consumer advocacy groups, such as Codacons, have urged immediate action, arguing that the existing legislation allows the Ministry of Economy and Finance (Mef) and the Ministry of Ecological Transition (Mase) to lower excise duties without delay. Codacons asserts that a new decree is not necessary, and that immediate intervention could alleviate pressure on consumers.
However, the government appears to be proceeding with a more comprehensive approach. Concerns have been raised regarding the potential impact on Italy’s 2026 budget targets. The government is also examining whether recent price increases at the pump are justified, with preliminary findings suggesting that some major oil companies have raised prices beyond levels recommended by their own guidelines. A meeting convened on Monday, March 9th, by an official dubbed “Mr. Prices” revealed discrepancies between average pump prices and company-recommended levels.
The potential intervention follows a previous review of fuel taxation in March 2025, which resulted in a decree aimed at gradually aligning excise duties on gasoline and diesel. That earlier measure sought to address environmental concerns by eliminating tax advantages for diesel fuel, a move expected to increase the annual cost of diesel by up to 22 euros per vehicle. The 2025 decree was part of Italy’s implementation of the European Union’s RePowerEU mission, aiming to reduce reliance on fossil fuels.
The current situation differs, however, in its immediate focus on addressing price spikes linked to geopolitical instability. The government has not yet indicated the specific level of excise duty reductions that might be implemented, or the criteria for determining when the “speculator” mechanism would be activated. The Council of Ministers is scheduled to discuss the draft decree on Wednesday, March 11th, but no final decision has been announced.
