Due to High Fuel Prices: No Vehicle Tax for Many Italians for One Year
In light of high fuel prices, Italy will not collect vehicle tax on small cars and motor scooters for one year. France has also responded – the country is extending state subsidies for certain sectors.
While Germany is still debating relief measures in response to high fuel prices, other EU member states have already made decisions. Italy will largely waive vehicle tax for one year. Prime Minister Giorgia Meloni's government decided in Rome to levy no tax in 2027 on all passenger cars with an engine output of less than 80 kilowatts.
The regulation also applies to all motorcycles and motor scooters, which are widely used in Italy. According to official figures, the measure covers a total of approximately 14.5 million vehicles.
Compensation Payments Insufficient for Regions
However, each owner may only claim a single vehicle: the regulation therefore does not apply to larger cars or second or third vehicles. The relief is also set to apply automatically to the vehicle with the lowest engine output. A car with an output of 80 kilowatts typically has an engine of around 110 horsepower. According to the government, the suspension of vehicle tax is intended primarily to provide financial relief for families.
Meloni, who has governed as leader of the right-wing party Fratelli d'Italia (Brothers of Italy) for nearly four years, described the vehicle tax (in Italian: bollo auto) as "one of the most hated taxes" in the country. Her right-wing coalition is presenting the latest decision as part of a series of tax relief measures. The left-wing opposition pointed out that Italy is in all likelihood set to elect a new parliament next year.
In Italy, revenue from vehicle tax is actually owed to the regions. According to business associations, the vehicle tax generates more than seven billion euros per year for regional coffers. The Meloni government initially allocated approximately 2.3 billion euros under the new decree to compensate for the shortfall next year. The regions consider this insufficient. Fuel prices in Italy have also risen sharply in recent months. Current per-litre prices stand at 2.13 euros for petrol and 2.24 euros for diesel.
French Companies to Receive State Aid
France's government has also responded to high fuel prices. There, the average price per litre of petrol had surpassed the previous record of 2022 at 2.15 euros, while a litre of diesel currently costs 2.35 euros. Prime Minister Sébastien Lecornu extended state fuel subsidies for affected sectors until the end of the year. The aim is to safeguard jobs and growth and to give businesses planning certainty.
Specifically, the subsidy for fishermen will increase from 25 to 35 cents per litre. Construction companies will continue to receive 20 cents per litre for construction machinery diesel. For farmers, the subsidy remains at 15 cents per litre and the measure is to be integrated into emergency drought relief. On Tuesday, French trade unions from various sectors staged strikes to protest against rising fuel prices and to demand higher wages.
TotalEnergies Fuel Price Cap Angers Competitors
Consumers in France are also receiving partial relief – though through a private company. The oil giant TotalEnergies has been offering capped fuel prices for five months. Customers at Total petrol stations are currently paying 1.99 euros per litre for petrol and 2.25 euros for diesel. Lecornu had called on the French company to introduce the cap in May – amid a debate over possible windfall profit taxes.
The price cap, which has been in place with interruptions for five months, has cost TotalEnergies between 250 and 300 million euros by its own account. At the same time, however, its profit in the first half of 2026 doubled to 11.2 billion euros. Competitors are critical of this, and accusations of "abuse of a dominant market position and unfair competition" are growing louder. The company is exploiting its position for an aggressive pricing policy, argues the association of independent petrol stations.
