Italy moves to keep energy bills down

Italian Prime Minister Mario Draghi on Thursday announced measures worth three billion euros ($3.5 billion) 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 percent, and that of gas by 30 percent,” 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 everything from incentives for renewable energy sources to the decommissioning of nuclear power plants. 

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 euros 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.

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.