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.
