In spring 2014, gas prices I've been seeing in Italy are generally between 1.69 - 1.89 euro per liter, which is roughly equivalent to over 9 US dollars per gallon (with current exchange rate of $1.38 for 1 euro). While gas is expensive, cars often get much better mileage than what you may be used to, especially cars with standard transmission. Diesel usually costs about 10 cents per liter less, and diesel cars get even better mileage so if you plan to drive a lot on your vacation, it's worth trying to rent or lease a diesel car.
The Renault Clio4 diesel I'm driving (through Renault Eurodrive) is rated at 69 miles per gallon (with standard transmission). Read more about the Renault Eurodrive buy-back lease program for tourists driving in Europe for 17 days or longer.