Italy approved a decree scrapping road tax for about 14.5mn cars and motorcycles in an effort to offset rising energy prices, the government said.
The exemption applies to vehicles with an engine power of up to 80kW, which covers around 70pc of Italy's car stock, with one vehicle per person eligible.
The measure will apply in 2027 alone, but the government said it intends to abolish the tax permanently through measures in its next budget. Prime minister Giorgia Meloni said that with no end in sight to the US-Iran war and fuel prices constantly rising, it no longer made sense to tackle the problem at the pump.
"We have chosen a structural measure rather than an emergency measure," she said late on Wednesday.
Rome has approved 15 packages since March to temper fuel price rises, mainly by offering discounts at the pump that have cost the state more than €2.3bn ($2.65bn). The latest decree includes a 12.2¢/litre discount on diesel fuel from 18-25 September followed by a 6.1¢/l discount from 26 September to 5 October.
Diesel prices have risen by more than those of gasoline this year, because of a Russian ban on diesel exports and the effects of the US-Iran war on availability from the Mideast Gulf.
Scrapping the 2027 vehicle road tax will cost €2.36bn, according to a draft version of the Italian decree. Government sources said unused EU Recovery fund money, including loans and grants will partly cover the cost. The new one-off diesel discounts will cost €111.8mn, the sources said.
Rome's move is one of several by European governments to help consumers with rising fuel costs. Germany plans measures to ease what chancellor Friedrich Merz described as "too big a burden", Spain has made a series of cuts to its fuel taxes, and the UK fuel retailers' association has called on the government not to raise fuel duty at the start of 2027.
