Italian refineries face pressure to boost output amid European fuel crunch
Italy's top energy and industry ministers have called an emergency meeting with major refinery operators for 8 October, seeking ways to squeeze more fuel from existing plants as pump prices climb across Europe. The meeting, hosted by Minister Adolfo Urso and Minister Gilberto Pichetto at Palazzo Piacentini in Rome, comes as Italian refineries operate at just 77% of capacity—well below full output despite rising demand.
The 10 active refineries in Italy, including two converted to biorefineries in Marghera and Gela, produced 63.7 million tonnes of refined products in 2025. Yet domestic consumption of transport fuels has grown, with gasoline sales up nearly 6% in the first half of 2026 and jet fuel rising 2.3%. Italy remains a net exporter of petrol and diesel, but imports cover about one-third of its jet fuel needs—a growing vulnerability as global production tightens.
Why more fuel isn't coming off the lines
Refiners aren't running flat-out due to a mix of technical and regulatory barriers. Europe's refining capacity has dropped by 400,000 barrels per day since early 2024, with five plants closed in just two years. Italy’s own Eni plant in Livorno is being reconfigured for biofuel production, reducing fossil fuel output even as demand climbs. Other units lack the modern configurations needed for ultra-low-sulfur diesel, and maintenance backlogs delay restarts.
Regulatory pressures compound the problem. EU climate laws like ReFuelEU Aviation and the Renewable Energy Directive (RED III) push refiners toward biofuels, reducing investment in traditional hydrocarbon infrastructure. Many plants now find it financially unviable to maintain or upgrade equipment for fossil products, especially given high carbon compliance costs under the ETS2 and methane reporting rules.
In addition, administrative delays at regional and national levels—often cited by industry insiders—slow permitting for repairs, fuel switchovers, and equipment upgrades. The so-called "bureaucratic bottlenecks" are not just Italian: similar delays hinder investments across Southern Europe.
Global supply shocks tighten the screws
Italy’s fuel squeeze isn’t self-inflicted. The closure of the Strait of Hormuz since March 2026 has cut off nearly 20% of global oil product exports. Simultaneously, Ukrainian drone strikes on Russian refineries have knocked out an estimated 1.2 million barrels per day of diesel and kerosene capacity. These events, combined with reduced output from Middle Eastern facilities, have starved Europe of refined petroleum.
The result: diesel prices in Germany, France, and Denmark have reached record highs above €2.40 per litre. In Italy, self-service diesel stood at €2.338 per litre in late September 2026—roughly 70% higher than two years ago and more than double the cost of bottled water. The retail sector, logistics firms, and small transport operators report operating costs up 20% year-on-year.
France's emergency plea—and what it means for Italy
On 18 September, French President Emmanuel Macron formally petitioned the European Commission to temporarily ease EU fuel quality standards, allowing refiners to increase production by 5–20% by relaxing limits on vapor pressure, density, and sulfur content—measures last used during the pandemic. He also requested flexibility on biofuel mandates and a one-year delay to methane emissions reporting rules taking effect in January 2027.
Italy is watching closely. Though the Commission has not yet responded, its position will likely shape Italy’s next steps. If the EU allows France to bypass its own rules, Italian ministers may pressure Brussels for equivalent flexibility—even as they push for deeper EU-wide coordination on strategic reserves.
What Italy can—and can’t—do
The Ministry of Environment and Energy Security confirms Italy maintains 90 days of import coverage for crude and refined products, meeting international obligations. Yet the state can’t force private refiners to exceed their technical or regulatory limits. Minister Urso’s office insists the October meeting is not about mandating output, but identifying real constraints so policy can adapt.
Analysts note Italy’s best near-term path is not producing more oil derivatives, but using existing refining capacity more intelligently: shifting production toward high-demand fractions like diesel and jet fuel while accelerating biofuel blending to ease strain. But without EU-wide regulatory relief, or a collapse in global supply, pump prices in Italy are unlikely to soften before winter.
