Italy's electricity bills to rise 29.8% in next quarter - regulator

Power lines connecting pylons of high-tension electricity are seen in Montalto Di Castro, Italy, August 11, 2017. REUTERS/Max Rossi/File Photo

ROME, Sept 29 (Reuters) - Household electricity prices in Italy are set to rise 29.8% in the next quarter and gas prices by as much as 14.4%, fuelled by an "extraordinary dynamic" in prices of raw materials that are heading for all-time highs, regulator Arera said.

Benchmark European gas prices have rocketed more than 300% this year, boosted by low storage levels, outages and high demand as economies recover from the COVID-19 pandemic, pushing up the costs of wholesale electricity.

In a statement, Arera said the expected increase is net of measures approved by the government, which last week set aside more than 3 billion euros ($3.51 billion) to curb the surge in retail energy bills in the last three months of the year.

Without such measures, it estimated, families would have faced increases of 45% and 30% in prices of electricity and gas, respectively.

"Government intervention smoothes the effect of a delicate phase for recovery and protects more fragile consumers," Arera chief Stefano Besseghini said in the statement.

More work was needed to reduce structural costs for energy, he added.

System charges, for example overheads to cover renewable energy subsidies and nuclear decommissioning, make up more than 20% of Italians’ final bills, on average.

European homes face much higher winter energy bills because of surging wholesale power and gas prices, which consumer groups have warned could result in fuel poverty for the region's most vulnerable.

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.

($1=0.8537 euros)

Reporting by Giulia Segreti; Editing by Clarence Fernandez

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