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Italy’s government will spend around 3.5 billion euros ($4.1 billion) to protect consumers from a surge in energy prices that’s hit 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 people said. The measures could be adopted in the budget in December. 

A spokesperson for the government declined to comment.

One of the options under consideration would directly re-allocate a part 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.

Surging Prices

Skyrocketing energy prices are plaguing European economies as they emerge from the Covid-19 pandemic and the impact is set to grow during the cold season. Italy already spent about 1.2 billion euros to mitigate the spike in power costs in the second quarter.

Other countries are also stepping to help consumers with soaring energy costs. France will hand out about 580 million euros to poor households, and Spain is planning a windfall tax on power utilities and a cap on consumers’ bills. 

Italy is particularly vulnerable as it is relies on imports to meet over 70% of its energy needs, with almost 40% coming from natural gas, according to official data.

Ecological Transition Minister Roberto Cingolani said earlier this week that power prices could increase by 40% in the third quarter, mostly on account of gas.

“Governments should be ready to help citizens and companies in facing the costs” of the transition to a zero-carbon economy, Draghi said this week.

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