Why prices and costs will increase in Italy in 2026: transport, insurance and excise duties

 

Why Prices and Costs Will Increase in Italy in 2026: Transport, Insurance, and Excise Duties

The year 2026 has arrived with a financial sting for millions of Italians. From the moment January began, a wave of price increases started hitting everyday expenses — and many of these are tied to deliberate policy decisions, tax changes, and regulatory measures that were finalized in 2025 and are now being implemented.

Whether you commute by car, send packages abroad, renew your insurance, or simply fill up at the pump, the effects are real and tangible.

But why exactly are prices going up? Let’s break down the three major drivers behind the cost increases in Italy this year — transport, insurance, and excise duties — and explain what’s behind them, how they impact households and businesses, and what to expect moving forward.

1. Rising Costs in Transport: From Fuel to Tolls

A. Accise on Fuel — A Tax Shift with Big Consequences

One of the headline changes this year revolves around a long-planned realignment of excise duties on fuel — particularly, the taxes applied to diesel and gasoline.

Starting on January 1, 2026, the Italian government equalized the excise duty on diesel and gasoline at 672.90 euros per 1,000 liters. This move was part of the 2026 Budget Law and had the effect of raising the excise on diesel by about 4.05 cents per liter, while reducing the excise on gasoline by roughly the same amount.

Why does this matter?

Diesel fuel — long cheaper than gasoline due to lower taxes — is now more expensive at the pump, even exceeding gasoline not seen in years.

For families and businesses that rely on diesel vehicles (which include many delivery drivers, agricultural operators, and small businesses), this shift adds a direct cost to daily life and logistics.

Codacons reported that this diesel tax increase alone will bring about €552 million in extra state revenue — but it also means more spending for consumers and firms alike.

In practical terms, drivers are seeing diesel cost €0.05–€0.07 more per liter on average. This may seem modest, but over hundreds or thousands of liters a year, the total adds up — from deliveries to commuting to everyday errands.

B. Logistics and Freight Costs Are Rising Too

Changes aren’t limited to fuel for cars.

New rules introduced in 2026 include:

✔ A fixed import contribution of €2 on packages arriving from outside the EU that are worth less than €150. This was introduced to regulate the massive volume of e-commerce logistics and is expected to significantly raise costs in the entire parcel delivery system.

✔ A general rise in motorway tolls — most concessionaires adjusted tariffs upward, typically around 1.5%.

Even when each increase sounds small on its own, the aggregate effect is that goods — from fresh produce to electronics — become more expensive. Higher transport costs feed into retail prices across sectors.

C. Impact on Consumers and Commerce

When the cost of moving goods rises, businesses have limited options:

absorb the cost (hurting profit margins), or

pass it on to consumers through higher prices.

In 2026, many are choosing the latter — and that’s a major factor contributing to overall price inflation in Italy.

According to consumer advocacy groups, fuel, tolls, insurance, and other costs added hundreds of euros more per family per year — and figures suggest average household spending could go up by €672 or more.

2. Insurance Premiums on the Rise

Another key area seeing price increases is insurance — particularly car insurance.

A. Higher Taxation on Insurance Policies

From January 1, 2026, the government increased the tax rate on ancillary coverages associated with auto insurance policies. These include protections like:

coverage for the driver’s injury, and

roadside assistance services.

The tax rate on these protections jumped from 2.5% to 12.5% for new or renewed contracts.

That’s a fivefold increase in tax, and it directly affects premiums.

B. Why Did This Happen?

The government introduced this change as part of its fiscal strategy to increase revenue — and possibly to balance costs across the insurance sector. Higher taxes on insurer revenues push part of the tax burden onto consumers.

Analysts estimate:

a typical Italian family could see €130–€140 more per year in insurance premiums, mostly due to these tax changes.

Insurance companies may also adjust base rates, often citing increased operational costs or regulatory pressure.

C. Wider Market Trends

This trend isn’t entirely isolated to fiscal policy. Insurance market conditions affect pricing too:

claims costs

fraud rates

administrative expenses

Reddit discussions and market analysis indicate that Italian car insurance has been rising even before 2026 — driven by risk profiles and uneven pricing algorithms — though the new tax measures could amplify these effects.

3. Excise Duties: Fuel, Tobacco, and More

Excise duties — taxes on specific goods — are a major part of Italy’s public revenue, and 2026 sees several of them rising or changing in important ways.

A. Tobacco and Related Products

In addition to fuel, Italy has increased excise duties on cigarettes and tobacco products.

Cigarette packs could rise by around €0.15 per pack in 2026.

Tobacco trinciato (loose tobacco) may increase by around €0.50 per unit.

E-cigarettes and heated tobacco products also see higher prices due to tax changes.

These increases serve dual objectives: raising state revenue and discouraging consumption, especially given health policy goals. But for consumers who smoke, the immediate impact is a more expensive habit.

B. Tourist and Local Excise Levies

While not strictly an excise duty in the classical sense, municipal taxes — such as the tourist tax — are also increasing in some regions. For example:

Municipalities can raise overnight accommodation levies.

UNESCO cities and areas near major events like the Milan-Cortina Olympics may impose higher charges up to €5 per night in some cases.

These local excise-like levies add up, especially for families planning travel or short stays.

4. What’s Driving These Price Increases at a Deeper Level?

It’s one thing to list the increases — but what’s underlying them?

Here are the root causes policymakers and analysts cite:

1. Fiscal Policy Choices

The 2026 Budget Law includes tax and duty adjustments designed to raise revenue for government spending. Some key elements, like the higher excise on diesel and new taxes on e-commerce parcels, were chosen specifically to increase public receipts.

The goal is partly fiscal balance, partly redistribution, and partly compliance with EU budget rules.

2. Inflationary Pressure

Although inflation has moderated from its peaks earlier in the decade, cost pressures remain — especially in energy, transport, and services. Automatic indexation of some tariffs (like tolls and public utilities) adds incremental increases.

3. Structural Costs and Global Pressures

Global supply chain issues, higher commodity prices, and transport bottlenecks continue to influence costs, even if international inflation has softened. When diesel prices rise in Italy due to taxes, for example, logistics companies have to adjust pricing to stay profitable — and that feeds into consumer costs.

5. How Families and Businesses Are Feeling It

The combined effect of these price increases doesn’t just stay on paper — it hits wallets.

According to recent reports:

Many families are already feeling the squeeze from higher fuel costs, insurance, and everyday expenses.

Consumer associations warn that overall additional spending could total close to €900 million collectively on items like fuel, insurance, cigarettes, and tolls.

In some regions, the annual cost of living increase per household is estimated at more than €700.

For small businesses — particularly those in transport, logistics, and delivery — the cost pressures are more acute. Diesel price hikes and toll increases affect operating expenses directly. Many businesses may pass on costs to customers or reduce margins to stay competitive.

6. Keep an Eye on What Comes Next

Most of the major cost increases are now in effect — but some elements will continue to evolve:

Parcel duties and logistics charges could expand further if EU-wide measures are adopted in mid-2026.

Insurance market trends may bring additional price volatility as companies adjust to new taxation and risk models.

Municipal taxes could increase more in tourist-heavy areas or for events like the 2026 Winter Olympics.

Final Thoughts: What This Means for You

As Italy navigates the shifting economic landscape of 2026, it’s clear that policy decisions have direct impacts on everyday life. From the price you pay at the petrol station to your yearly insurance premium, these changes reflect broader priorities — fiscal, environmental, and social.

For consumers, awareness and planning are key. Budgeting for increased transport costs, comparing insurance providers more actively, and adjusting consumption habits can help cushion the impact. And for businesses, strategic cost management and communication with customers become more important than ever.

Ultimately, while rising prices are never welcome news, understanding the why behind them helps families and firms make informed decisions — and keeps the conversation grounded in facts and policy drivers.