Italy's Energy Minister sets out a path to reduce gas prices

Gilberto Pichetto Fratin, the Energy Minister said that Italy was targeting gas transport costs in order to reduce domestic energy bills.

Giorgia Melons, the Italian Prime Minister is being pressed to lower the price of energy for both companies and consumers who pay much higher prices than the average in Europe.

Pichetto stated during a Milan conference that he wanted to "correct an anomaly".

The PSV (wholesale price) for natural gas on the Italian market is usually higher than the FFT (which is traded at the Amsterdam hub), by about 2-4 euros per Megawatt Hour.

The government is looking for a way to reduce the cost of transporting gas from northern Europe into Italy, which accounts for around 10% total gas consumption.

Pichetto explained that the cancellation of the transport costs could be done in a variety of ways, including by reimbursing those who paid for them. He added that the energy authority would determine the exact mechanism.

The Minister did not specify whether the government will be paying for reimbursement of transportation costs. However, he said that he believed this measure could significantly reduce gas bills for consumers.

All this could have an extremely significant impact, amounting to hundreds of millions in bills paid by the citizens." (Reporting and writing by Giancarlo Landini and Francesca Landini; editing by Cristina Carlevaro, Elaine Hardcastle and Gianluca Landini)

(source: Reuters)