The Italian government has introduced temporary tax reductions on fuel to ease the financial strain on households and businesses caused by rising energy costs linked to tensions in the Middle East.

Prime Minister Giorgia Meloni announced that excise duties on petrol and diesel would be reduced, lowering fuel prices by around 25 cents per litre. She confirmed the decision during an interview with national broadcaster RAI TG1, shortly after the cabinet approved the emergency decree.

The move comes at a politically sensitive time for Meloni’s administration. Italian voters are set to head to the polls on March 22–23 to decide on a controversial proposal to overhaul the country’s judicial system — a plan strongly supported by the governing right-wing coalition but opposed by centre-left parties.

Critics from the opposition Democratic Party described the fuel tax cut as a delayed response to the ongoing energy crisis. They also suggested the measure was designed to strengthen public support for the government ahead of the referendum.

Government officials indicated that the reduction in fuel duties is expected to remain in effect for approximately three weeks. In addition, the decree includes plans to allocate around €608 million in tax incentives to help transport companies manage diesel costs.

Meanwhile, Deputy Prime Minister Matteo Salvini met representatives from major fuel station chains in Milan, warning that authorities would closely monitor pricing practices. He stressed that the government could introduce higher taxes for companies found to be taking advantage of the situation.

Last month, Italy increased its IRAP corporate tax on energy firms as part of broader efforts to fund measures to lower wholesale electricity prices. The adjustment is expected to generate roughly €1 billion in public revenue by 2028.

The latest decree also creates a legal framework allowing authorities to report companies suspected of sharply increasing fuel prices without justification. Salvini, leader of the League party, said the government’s goal is to keep diesel prices below €1.90 per litre, down from current levels of about €2.10.

At the European level, Meloni has been urging fellow EU leaders to consider temporarily suspending the Emissions Trading System (ETS). The scheme — the bloc’s main climate policy — requires industrial polluters and power producers to purchase carbon allowances while limiting the overall number of permits in circulation to reduce emissions over time.