BAKU, Azerbaijan, September 28. The decision by
the State Oil Company of Azerbaijan (SOCAR) to cap gasoline and
diesel prices across the Italian Italiana Petroli (IP) network
marks a significant milestone in the new phase of Azerbaijan’s
presence in the Italian energy market. Until recently, energy
cooperation between Azerbaijan and Italy was primarily driven by
oil and gas supplies. Today, that model is expanding considerably:
through SOCAR, Azerbaijan is establishing a direct presence in the
refining, logistics, and wholesale and retail trade of petroleum
products within one of Europe’s largest energy markets.


SOCAR has announced the phased rollout of a price-capping
mechanism for gasoline and diesel, starting with the entire
IP-branded station network. While a specific price ceiling has not
yet been set, the company intends to determine the level based on
market demand and the economic viability of the supply chain.
Future plans may see the mechanism extended to Esso-branded
stations and other operators that source fuel from IP.


This decision comes against the backdrop of significant price
increases in the Italian market. According to the latest data from
the Ministry of Enterprises and Made in Italy, as of September 27,
the average self-service price for gasoline on the road network was
2,159 euro per liter, while diesel stood at 2,377 euro. Prices on
motorways were even higher, 2,254 euro and 2,459 euro,
respectively. The situation regarding diesel is particularly
striking, with motorway prices approaching the 2.50 euro-per-liter
mark.


Thus, SOCAR is entering the Italian market at a time when fuel
costs have ceased to be merely a matter for individual companies
and are directly impacting households, the transport sector, and
businesses.


Almost simultaneously with SOCAR, Italy’s Eni took a similar
step, setting price caps for Enilive fuel at 1.99 euro per liter
for gasoline and 2.19 euro for diesel. SOCAR’s decision therefore
aligns with the emerging response from major Italian market players
to the growing financial burden on consumers.


However, there is a fundamental difference in SOCAR’s position:
for the Azerbaijani company, this is not simply about regulating
prices within its own retail network. IP became part of SOCAR only
recently, and the use of its infrastructure is already
demonstrating the advantages offered by a vertically integrated
presence in the European supply chain.


It’s notable that Italian Prime Minister Giorgia Meloni, in
commenting on SOCAR’s decision, directly linked it to bilateral
cooperation and expressed her gratitude to the President of
Azerbaijan Ilham Aliyev, and SOCAR President Rovshan Najaf. Thus,
the initiative has acquired not only corporate but also political
significance for bilateral relations.


Italiana Petroli becomes a strategic asset for
SOCAR


SOCAR completed the acquisition of a 99.82% stake in Italiana
Petroli this year. The deal marked the Azerbaijani company's
largest step toward expanding its downstream business in
Europe.


The scale of the acquired business is crucial to understanding
the changes underway. IP operates two refineries, in Ancona and
Novara, with a combined capacity of approximately 10 million tons
per year, as well as around 4,500 service stations; it is involved
in wholesale fuel sales, storage and logistics systems, and the
production and sale of bitumen, aviation fuel, and lubricants.


In other words, SOCAR has acquired more than just a network of
service stations in Italy. It has secured an established
infrastructure that enables a presence at virtually every key stage
of the downstream value chain, from refining and storage to
wholesale operations and the end consumer.


This is precisely where the strategic significance of the deal
lies.


Before the acquisition of IP, Azerbaijan was primarily a
supplier of energy resources to Italy. After the acquisition, the
company from Azerbaijan becomes simultaneously an investor, owner
of refining facilities and a participant in the Italian domestic
oil products market. This is a qualitative change in the
relationship model.


Energy cooperation between the two countries is already on a
significant scale. From January through August 2026, Azerbaijan
exported 8.47 million tons of crude oil and petroleum products
worth $5.2 billion to Italy. Value volume increased $424 million,
or 8.8%.


At the same time, the Italian direction has remained one of the
most important markets for Azerbaijani oil in recent years. In
2021, supplies amounted to 12.58 million tons, in 2022 - 8.9
million tons, in 2023 - 11.1 million tons, in 2024 -10.95 million
tons, and in 2025 - 13.1 million tons.


If oil cooperation has historically formed the basis of energy
relations, then natural gas is gradually becoming a second, no less
important pillar.


Italy is the largest market for Azerbaijani gas. In 2025,
Azerbaijan exported 25 billion cubic meters of natural gas, of
which 9.5 billion cubic meters went to the Italian market - about
38% of total exports.


From January through July 2026, Azerbaijan exported 4.89 billion
cubic meters of gas worth about $2.38 billion to Italy.


These indicators take on additional significance in the context
of the ongoing restructuring of the European energy market. Through
the Trans Adriatic Pipeline (TAP), which is the European segment of
the Southern Gas Corridor, more than 60 billion cubic meters of gas
have already been supplied to Europe, of which 50 billion cubic
meters to Italy.







At the same time, Italy’s importance for Azerbaijani gas goes
beyond bilateral supplies. Since January 2026, SOCAR began
supplying significant volumes of gas transported via TAP to buyers
in Austria and Germany. Thus, the Italian infrastructure actually
becomes part of a wider system for the entry of Azerbaijani gas
into European markets.


That is why the further development of TAP is becoming one of
the key issues in the future energy partnership.


During Giorgia Meloni's visit to Baku in May 2026, Azerbaijani
President Ilham Aliyev said that the parties discussed increasing
gas supplies to Italy and emphasized the need for further expansion
of TAP.


This fully corresponds to the logic of the current structure of
relations. On the one hand, Italy needs diversified energy sources.
On the other hand, Azerbaijan needs to expand its opportunities to
enter European markets. TAP in this system acts as a physical link
between the resource base of Azerbaijan and demand in Europe.


However, energy connections are no longer limited to
pipelines.


Energy and investment become one system


The peculiarity of the current stage is that energy relations
between Azerbaijan and Italy are beginning to connect several
levels at once: supply of raw materials, transportation,
processing, logistics, retail trade and investment.


According to the Central Bank of Azerbaijan, the Italian energy
sector became the largest area of ​​Azerbaijani foreign investment
in the first half of 2026. A significant part of these investments
was associated with the acquisition of a stake in Italiana
Petroli.


At the same time, the State Oil Fund of Azerbaijan has invested
about $3 billion in the Italian economy in recent years.


Thus, capital flows in both directions: Italy is a large market
for Azerbaijani energy resources, and Azerbaijan is becoming a
significant investor in Italian energy infrastructure.


This creates a much more robust pattern of interdependence than
a simple buyer-supplier arrangement.


Azerbaijan ranks second in oil and gas supplies to Italy, and
the Italian side emphasizes the need to develop not only the volume
of energy supplies, but also the quality of industrial partnership.
Thus, we are talking about a transition from trade in energy
resources to the formation of a joint industrial and investment
ecosystem.


From energy partnership to strategic
connection


Ultimately, today's Azerbaijani-Italian energy relations can no
longer be described solely by the volumes of oil and gas.


On the one hand, Azerbaijan remains one of the key suppliers of
energy resources for Italy. On the other hand, through SOCAR he
becomes the owner of a large downstream infrastructure directly
within the Italian economy. In parallel, Azerbaijani gas through
Italy receives additional access to other European markets, and
Italian capital and technology continue to participate in projects
in Azerbaijan.


That is why the acquisition of Italiana Petroli should be seen
as a logical continuation of the energy partnership formed around
the Southern Gas Corridor and oil supplies, but at a different
level.


Previously, the main question was how much oil and gas
Azerbaijan can supply to Italy. Now, another question arises: what
role can SOCAR play directly within Italy’s energy system, and how
far can the integration of the two markets go?


The answer will depend on more than just fuel prices, supply
volumes, or the expansion of TAP. Key factors will include
investments in refining, logistics, and the development of new
energy projects, as well as the ability of both countries to link
energy cooperation with transport and industrial
interconnectivity.