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4 Sep, 2022 15:00

Italy’s energy-import costs to double to €100 billion – Reuters

The dramatic surge amounts to nearly 3% of Italian GDP
Italy’s energy-import costs to double to €100 billion – Reuters

The cost of energy imports into Italy are expected to double to €100 billion, Reuters reported on Saturday, citing the country’s Economy Minister Daniele Franco.

Rome cannot keep spending indefinitely to cushion the blow to the economy, the minister warned, speaking at the annual Ambrosetti business forum. He added that Italy’s high debt reduces its room to maneuver, going forward.

According to Franco, the increase of nearly €60 billion, compared to Italy’s net energy-imports cost of €43 billion recorded last year, will amount to roughly 3% of the country’s GDP in 2022.

The wild surge is expected to wipe out the net surplus in exchanges with the rest of the world Italy recorded in recent years, the minister said.

“We are transferring abroad a significant part of our purchasing power,” he remarked.

Italy reportedly relies on imports for nearly 75% of its energy consumption, increasing its vulnerability to the current energy crisis raging across the region. At the start of the current year, Italy was importing 40% of its gas from Russia, but in July purchases of gas from the sanctions-hit nation dropped to 25%. Thus, Italy has overtaken Germany in terms of reducing its dependence on Russian gas.

In late July, EU members agreed on the plan to reduce their gas consumption by 15% over the coming months. The step is aimed at increasing the bloc’s energy security by saving gas for the coming winter amid the growing energy crisis

Earlier, the Chief Executive Officer of Italy’s state-run Eni, Claudio Descalzi, said that the country could survive the winter without Russian gas. He added that Italian gas-storage facilities were 54% full as of June, but they should be 70-80% full by October.

On August 31, Eni announced that Gazprom had reduced gas supplies to Italy from 27 million cubic meters to 20 million cubic meters. Starting September 2, Gazprom completely cut off supplies via the Nord Stream 1 pipeline, citing technical issues.

For more stories on economy & finance visit RT's business section

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