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11h ago

Italy Implements Fuel Tax Shift to Equalize Gasoline and Diesel Rates

New excise rates take effect, reducing gasoline tax and increasing diesel tax by 1.50 euro cents per liter, with additional revenue directed to public transport funding.

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Overview

  • The Italian government has enacted a ministerial decree adjusting excise duties, effective May 15, 2025, reducing gasoline tax to €71.34 per liter and raising diesel tax to €63.24 per liter.
  • This policy is part of the Meloni administration's broader fiscal reform to equalize fuel tax rates over the next five years, aligning with EU environmental recommendations.
  • The excise realignment aims to phase out diesel's historical tax preference, discouraging the use of higher-polluting fuels.
  • Despite being framed as a zero-sum adjustment, Italy's larger diesel consumption is expected to generate significant net revenue for the Treasury.
  • Additional proceeds from the tax changes are allocated to the National Fund for local public transport improvements, supporting state commitments to public infrastructure.