Italian finance ministry will spend around 3.5 billion euros $4.1 billion to protect consumers from a surge in energy prices that has affected countries across Europe, according to people familiar with the matter.
The disbursement could be approved as soon as next week, the people said, asking not to be named discussing confidential plans.
Prime Minister Mario Draghi s administration is also reviewing options to permanently protect low-income households from further increases in their power bills. The measures could be discussed in December budget as expected.
The spokesperson for the government declined to comment.
One of the options under consideration would directly re-allocate a portion of tax revenues to reducing the cost of electricity for poorer families, the people said. No decision has been made and the government's plans could still change according to the people.
Skyrocketing energy prices are affecting emerging economies as they emerge from the Covid-19 pandemic and the impact is set to grow during the cold season. Italy has already spent almost 1.2 billion euros to mitigate the spike in power costs in the second quarter.
In addition, other countries are increasing their energy consumption to help companies curb soaring energy costs. Spain will hand out about 580 million euros to poor households and France is planning a windfall tax on power utilities and a cap on consumers bills.
Italy is particularly vulnerable as it relies on imports to meet more than 70% of its energy needs, with almost 40% from natural gas, according to official data.
Ecological Transition Minister Roberto Cingolani said earlier this week that power prices could rise to 40% in the third quarter, mostly on account of gas.
Governments should be ready to help citizens and companies in facing the costs of transitioning to zero-carbon economy, Draghi said this week.