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Oil report

Italy sets aside more than 3 bln euros to curb energy bills

ROME, Sept 23 (Reuters) - Italy’s government has set aside more than 3 billion euros ($3.5 billion) to curb a strong increase in retail energy bills in the last three months of the year triggered by soaring natural gas prices on many world markets.

After a cabinet meeting on Thursday, it said it had decided to eliminate a series of system charges in consumer bills, cut taxes, and increase power and gas bonuses for the less well-off.

The measures are designed to help more than 5.5 million low-income consumers and around 6 million very small and small enterprises.

System charges, which include things like overheads to cover renewable energy subsidies and nuclear decommissioning, account on average for more than 20% of Italians’ final bills.

Prime Minister Mario Draghi said earlier on Thursday the increase in energy prices was partly temporary but added if nothing was done power prices could rise by 40% in the next quarter and gas by 30%.

“These measures must be followed by action, including at European level, to diversify energy supplies and strengthen the bargaining power of purchasing countries,” he said.

Spain urged the European Commission on Monday to devise guidance to help member states react consistently to power price spikes without testing the rules of the bloc.

Households across Europe face much higher winter energy bills due to surging wholesale power and gas prices, and consumer groups have warned the most vulnerable in the region could experience fuel poverty as a result.

Italy’s energy regulator sets gas and electricity prices on the non-liberalised retail market every three months and will fix prices for the final quarter before the end of this month.

In its last quarterly review, it raised power prices by 9.9% but said that increase would have been around 20% if Rome had not injected 1.2 billion euros of resources to cut system costs.

$1 = 0.8519 euros Reporting by Stephen Jewkes and Giuseppe Fonte; Editing by Steve Orlofsky

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