Household electricity prices in Italy are set to rise 29.8% in the next quarter and gas prices by as much as 14.4%, fuelled by an “extraordinary dynamic” in prices of raw materials that are heading for all-time highs, regulator Arera said, according to Reuters.

Benchmark European gas prices have rocketed more than 300% this year, boosted by low storage levels, outages and high demand as economies recover from the COVID-19 pandemic, pushing up the costs of wholesale electricity.

In a statement, Arera said the expected increase is net of measures approved by the government, which last week set aside more than 3 billion euros ($3.51 billion) to curb the surge in retail energy bills in the last three months of the year.

Without such measures, it estimated, families would have faced increases of 45% and 30% in prices of electricity and gas, respectively.

“Government intervention smoothes the effect of a delicate phase for recovery and protects more fragile consumers,” Arera chief Stefano Besseghini said in the statement.

More work was needed to reduce structural costs for energy, he added.

Prime Minister Mario Draghi’s administration has already spent about 1.2 billion euros ($ 1.40 billion) in the second quarter of 2021 to offset rising energy prices and will continue to use the same mechanism, sources said they wanted to keep anonymity. The intervention led to a reduction in the increase in electricity prices to 9%, compared to an advance of 20% before the state intervention.

Italy is particularly vulnerable because it is dependent on imports to cover 70% of its energy needs, with almost 40% coming from natural gas, according to the Ministry of Ecological Transition. The country is the second largest importer of natural gas in Europe, after Germany.