Diesel: a transitional decree paving the way for variable excise duties. Price rises to result in 800 million in additional costs in August
Proposals for action are taking shape: the focus is primarily on diesel, which has risen (by 29.6 cents since the start of July) more than petrol (by 17.3 cents). Following the first few days of August, a new round of price cuts will be covered solely by VAT
Key points
The new measure to curb fuel prices is expected this week. It will take the form of a decree-law, focusing in particular on diesel and backed by a ministerial decree to channelling the small additional sum provided by June’s VAT windfall. The idea is to build a bridge, costing around a hundred million, towards the next round of variable excise duties, which, after the first few days of August, could once again take centre stage by funding the discounts with July’s VAT windfall. If the revenue is sufficient, the second phase would follow the same pattern as in June, when price volatility was lower and 149.4 million covered a month of (mini) discounts.
The latest price rises
On Sunday, too, the figures on the display boards at petrol stations showed the usual string of price rises. The average price of diesel on the road network has risen to 2.184 cents per litre, less than three cents short of the all-time high recorded in mid-March 2022, which – unless there is a reversal in the trend – will be reached shortly. On the motorway, the average has soared to 2.255 euros per litre. For petrol, prices range from 1.981 euros per litre on ordinary roads to 2.071 at motorway service stations. During July – a month that has seen the breakdown of the truce between the US and Iran alongside new threats from the Houthis in the Red Sea – the price of petrol has risen by 17.5 cents per litre so far, whilst diesel has risen by 30 cents.
Upcoming measures
It is precisely the difference in the volatility of the two fuels that increases the likelihood of a measure aimed primarily or exclusively at diesel. In fact, the funding is not to be found in the budget, but more likely in areas such as ETS revenues and antitrust fines, which have already been addressed by the latest fuel decrees, and these resources are not infinite. Such circumstances suggest that the measure should be focused on the more expensive fuel, not least to ensure it is felt by the public. The precedent being considered is recent: namely, the decree issued at the end of April (Decree-Law 63/2026) which allocated 146.5 million to fund nine days of discounts, from 2 to 10 May, amounting to 24.4 cents per litre on diesel and 6.1 cents on petrol.
The bill at the petrol station
As well as being the most expensive, diesel is also the most widely used fuel. On an average day, just under 110 million litres are consumed in Italia, and with 76.8 million litres, diesel accounts for around 70 per cent of purchases. At this rate, the price rises seen so far in July amount to an additional cost at the pump of around 28.4 million per day, or 880 million per month. A partially positive note may come from August’s consumption figures, which – despite the multicoloured stickers used to gauge traffic intensity on holiday routes – are on average lower than in other months due to the lull in industrial activity and restrictions on lorry traffic. This dual factor reduces diesel consumption, whilst petrol is being purchased slightly more than usual. Based on August 2025 figures, the cost of the Middle East crisis to motorists’ wallets is expected to be around 800 million next month, compared with prices at the start of July.
The Reasons Behind Politics
The aim of the new measures the Government is working on is not to fully offset these price rises, but to mitigate them so that, if the figures allow, retail prices can be kept below the symbolic threshold of two euros per litre.
