Socar to Cut Italy Fuel Prices, Pre-Empting Meloni Windfall Tax

Azerbaijan’s Socar will cut fuel prices at its Italian service stations, a move that follows a similar commitment by Eni SpA and eases pressure on Premier Giorgia Meloni’s coalition to impose a windfall tax on energy companies ahead of the next election.

Foreign Minister Antonio Tajani said Sunday the move will apply nationwide after he asked Socar President Rovshan Najaf earlier this month to take action. “No imposition from above, no new tax on companies, but a voluntary contribution to help Italian citizens,” Tajani wrote in a post on X. “We in Forza Italia were right.”

Meloni’s coalition, which includes her own Brothers of Italy party, Tajani’s pro-business Forza Italia, and the populist League party, has been split on the matter. Italy’s fiscal breathing room remains limited, but voluntary moves by energy majors to reduce or cap prices remove the difficult political calculus of further taxing business in what will likely be Meloni’s last budget ahead of a general election that’s expected next year.

Meloni said the move by Socar, which completed the acquisition of the fuel retailer Italiana Petroli this year, was “an important sign of attention for Italian families.” She thanked Azerbaijani President Ilham Aliyev for a move that “strengthens our co-operation.” Meloni visited the Azerbaijani capital Baku in May, vowing closer ties in energy and other sectors.

Italy lowered taxes on fuel prices beginning in March, shortly after the US-led war in Iran began, to underpin consumption. A tax cut on diesel is set to expire next month. Eni, which is state-controlled, said Friday it would cap diesel and unleaded fuel prices at €2.19 ($2.50) and €1.99 per liter, respectively, about 17 cents below current average prices.