The household price of natural gas in Italy reached the unprecedented level of 14 euro cents per kilowatt-hour in the second semester of 2022. This price was caused by the cut-off of energy exports from Russia and the consequent energy crisis. Prices had decreased to 10.44 by June 2023.
Italy’s dependence on gas imports
The domestic production of natural gas in Italy in 2022 was just above three billion cubic meters. Natural gas consumption in Italy was over 20 times larger. This leaves Italy heavily dependent on foreign gas imports. Besides Russia, whose imports to Europe decreased sensibly in 2022 and 2023, the main natural gas importers to Italy in were Algeria and Azerbaijan.
Natural gas taxation among the highest in Europe
Italy had some of the highest natural gas prices in Europe. This was due to the heavy dependence on natural gas imports and on the high taxation applied to fuel consumption in this country. The value-added tax on natural gas in Italy accounted for 22 percent of the household gas price in Italy in the first semester of 2022. In Italy, consumers also pay an additional regional tax and a second tax based on the energy consumed. In 2022 and 2023, the value-added tax was decreased by the Italian government to five percent, to help the consumers face the natural gas cost increase.