Italy’s Draghi announces €3 billion package to keep energy prices down

A handout photo made available by Chigi Palace Press Office shows Italian Prime minister Mario Draghi attends the annual assembly of the industrial employers' federation Confindustria in Rome, 23 September 2021. Speaking to the annual assembly, Draghi said, among a number of topics, that the government estimates that the Italian growth will be around six percent this year. [Handout photo/EPA/EFE]

Italian Prime Minister Mario Draghi on Thursday (23 September) announced measures worth three billion euros to keep gas and electricity bills down this winter as power prices soar across Europe.

He told the Confindustria employers association the measures would particularly target the poorest and most vulnerable.

“In the absence of government intervention, in the next quarter the price of electricity could increase by around 40%, and that of gas by 30%,” Draghi said.

“For this reason we have decided to eliminate for the last quarter of the year the system costs for gas for everyone, and for electricity for families and small companies.”

System costs are added to energy bills to cover measures such as incentives for renewable energy sources.

Ministers green-lighted the move at a cabinet meeting later Thursday.

Draghi said the government will also boost energy bonuses for the less-well off groups, in a package worth more than three billion euros, which followed €1.2 billion pledged in June.

The former European Central Bank chief said that many of the reasons for the energy price increases were temporary but called for long-term action, including at a European level, to address the problem, including through diversifying supplies.

EU energy ministers meet to discuss power price surge

Energy ministers from European Union countries will on Wednesday (22 September) discuss the soaring price of gas and electricity across Europe, as some governments draw up measures to protect their consumers.

Italy is highly dependent on imports and consumes a large amount of gas. Some 40% of its primary energy consumption is gas, compared with about 15% in France, according to official statistics for both countries.

Consumer association Unione Nazionale Consumatori said cutting out the system costs would not be enough to help struggling families, and the government should also axe the excise duty as well.

Europe is facing soaring power prices as its economy recovers from the coronavirus pandemic, and as winter approaches while natural gas reserves are at a worrying low level.

A profound EU transformation towards a low-carbon future, phasing out fossil fuels, is adding to the pressure on the bloc’s market and on households.

The European Commission said on Wednesday it is poised to validate “short-term temporary measures” to tackle the effects of a global energy crisis.

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