SOCAR matches Eni's fuel price cap, helping Italy tame costs

By Giuseppe Fonte and Francesca Landini

ROME, Sept 28 (Reuters) - Azerbaijan's state oil company (SOCAR) will match a price cap on fuels sold in Italy adopted by Eni, sources said on Monday, helping Prime Minister Giorgia Meloni's efforts to tame rising energy costs amid global supply disruptions.

Asking not to be named, people familiar with the matter told Reuters SOCAR was capping diesel prices at the pump at €2.19 ($2.49) per litre and petrol at €1.99 per litre. It was not immediately clear when the cap would be introduced.

Eni's cap became fully effective on Monday but has so far had little impact in lowering average fuel prices for motorists, according to industry minister data on Monday.

Self-service prices for petrol stood at €2.152 per litre on Monday from €2.159 on Sunday, while diesel prices also eased marginally to €2.369 from €2.377. Prices on motorway networks were €2.214 for petrol and €2.420 for diesel.

"Despite Eni's extensive distribution network, the impact on national averages was quite small," Italy's National Consumers Union said in a statement.

SOCAR, which sells fuel in Italy through its local unit Italiana Petroli (IP), said on Sunday it would "progressively" implement a cap, without disclosing the new prices.

The sources said the company had begun to align with Eni at some of its service stations but the impact was not incorporated in the industry ministry's data issued early on Monday.

SOCAR and Eni control more than 40% of Italy's pump station network.

Rising energy and consumer prices due to the Middle East conflict has been a major headache for Meloni, who has tried for months to shield households and businesses while keeping Italy's strained finances in check.

Prior to Eni's decision, Meloni had repeatedly renewed temporary cuts in fuel excise duties in order to curb costs for motorists, at a total cost, including tax breaks for truck drivers, of around €2.8 billion in lost revenue.

The government's latest cut, which is set to expire on October 5, only covers diesel and was reduced on Saturday to around 6 cents per litre from 12 cents.

Eni shares were up by around 2.2% as of 1320 GMT as traders bet that profits arising from the energy crisis will more than offset costs associated with the price cap.

Broker Intermonte said the cap could persuade Rome to pull back from mooted plans to introduce a windfall tax on energy companies.

Amid the ongoing efforts to curb price rises, a government official told Reuters on Monday that Rome was considering easing regulations in requirements in order to help refiners boost their domestic production.

($1 = 0.8800 euros)

(Editing by Alexander Smith and Gavin Jones)