The inflation caused by the war in Ukraine has cost us a lot, including a general increase in consumer prices and electricity and gas bills. But now we have a more precise estimate of the state’s outlay: 3 billion euros. A deadweight loss. At the height of the Russian supply crisis, the government had in fact taken action by purchasing billions of cubic meters of gas at the exceptionally high prices of the time to fill storage and reduce the risk of shortages. Now, the unused gas has been auctioned by Snam, but the prices are four times lower than in the past: it is impossible to recover the costs. The loss is recovered from the bills, but not only that.
Snam’s 10 auctions
After ten auctions held between 25 June and 27 August, Snam sold just under 1.9 billion cubic meters out of the 2.2 billion placed on the market. Gross revenues are around one billion euros. Therefore, approximately 309 million cubic meters remain, which will be re-proposed in the auction scheduled for September 3, according to the program published by the state-controlled company.
The public results of the Energy Markets Manager report the prices, quantities and number of operators with accepted offers, but not the company names of the successful tenderers. For example, in the last session on August 27th there were two operators, but on other days the number reached as many as twenty-three.
The billion obtained is only part of the value recovered by selling the gas purchased four years earlier at much higher prices. The sum will be transferred to the Energy and Environmental Services Fund, the Csea, to reduce, until 31 December 2026, the transport and distribution charges applied to industrial customers directly connected to the network, to gas companies and other large consumers above 80 thousand cubic meters per year. Furthermore, they will be used to finance, up to 200 million, the new “liquidity service” designed to increase supply on the Italian market and contain the effects of higher import costs from Northern Europe.
Because the government bought gas at record prices
The government had entrusted Snam and the Energy Services Manager (GSE) with a “filling service of last resort” to buy gas on the market and fill the stocks above the 80 percent target set by the EU Commission, reaching 90 to make up for the reduction in supplies from Russia.
According to data published by Arera, in 2022, the GSE and Snam had purchased 37.7 million megawatt hours of gas, at a cost of 6.684 billion euros. The purchase took place in an exceptional phase: in August 2022 European gas prices reached 300 euros per megawatt hour. For example, according to parliamentary documentation, the GSE had purchased approximately 1.637 billion cubic meters – equal to 17.878 million megawatt hours – spending 3.995 billion euros. The average cost was 223.5 euros per megawatt hour.
How do you get to 3 billion hole
But by the time the purchased gas had to be sold, prices had already collapsed. Considering the first 5.679 million megawatt hours put on the market after the crisis, the average price obtained was around 66 euros per megawatt hour, producing a loss of 892.68 million euros. The other lots were then added to these.
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The possibility of a capital loss had been reported even before the purchases. In July 2022, Arera warned of the “possible insufficiency of the revenues obtained from the sale of gas” in the event that the sale prices were lower than the purchase prices.
The 2025 budget of the GSE reports the devaluation of the remaining gas which, added to the 892.6 million of gas already sold at lower prices, leads to a loss of approximately 3.25 billion. The higher prices of the other 2026 auctions reduced that value, however bringing the final estimate towards a deadweight loss of 3 billion: this is the difference between the 2022 and 2026 prices.
But there are also other extra costs. In fact, the cost incurred to conserve gas is added to the loss caused by the collapse in prices: around 40 million per year. In 2025 alone, the GSE accounted for 46 million euros for the last resort filling service, “with particular reference to the costs for maintaining natural gas in storage”. In 2024 the charges amounted to approximately 40.3 million.
Who pays for the loss and how much ended up on the bill
The GSE had received an interest-free loan of up to four billion from the state to buy gas. The 2025 Bill decree subsequently established that the Manager would only return to the State the amounts actually obtained from sales made by 2024. The unrecovered part of the financing was therefore not returned in full to the Treasury.
To finance this “special” purchasing mechanism, first gas bills and then electricity bills increased. Initially, between October 2024 and March 2025, Arera applied a specific quota of 2.26 cents per cubic meter to the “Osstui” tariff component present in gas bills. The weight: 22.60 euros, before VAT, for every thousand cubic meters actually consumed in the semester.
But in order not to burden this cost on the gas used by the thermoelectric power plants, their share was reimbursed and recovered through the fees applied to electricity withdrawals, quotas included in the dispatching costs paid in electricity bills. The withdrawal was equal to one euro per 1,000 kilowatt hours in the last quarter of 2024, then around 62 cents in the first quarter of 2025, 33 cents in the second and 1.05 euros in the third. From the fourth quarter of 2025 the specific quota has been eliminated.
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In the end, the GSE returned to the state budget only the sums collected from sales made by 31 December 2024, while the subsequent proceeds were transferred to the CSEA and allocated to measures against high energy prices. In general, the cost of these extraordinary gas purchases was therefore distributed between CSEA accounts and components that ended up in gas and electricity bills. The state budget took care of everything else.
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