Italy: industry prices of natural gas 2008 to 2020

For an annual consumption of less than 100,000 gigajoule, the industry prices for natural gas peaked in 2012 at 4.09 euro cents per kilowatt hour, but decreased again in the following years, reaching 3.08 euro cents per kilowatt hour in 2020. Since Italy relied on gas imports for over 90 percent of its demand, the industry price of gas was mostly dependent on the wholesale price rather than the domestic market.

Russia: the main supplier

Italy’s energy demand strongly depended on gas: in 2018, natural gas accounted for nearly 60 percent of the total amount of energy consumed in the country. Providing more than 32 billion cubic meters in 2018, Russia was the main gas supplier for Italy. Russian gas was the cheapest to import: gas came to Italy via the Tarvisio pipeline, one of the five pipeline entry points in the country. Placed at the center of the gas supply network linking Europe, North Africa, Russia, and the Caucasus, Italy was in a strategically crucial position for the gas supply in Europe.

Domestic production

In 2018, the domestic production amounted to 3.4 billion cubic meters, about a tenth of the volume imported from Gazprom. Italy’s natural gas reserves, which concentrate mostly in the Po Valley, Ionian Sea, and Adriatic Sea, are underutilized. In fact, the country emitted an 18-month ban on new oil and gas exploratory permits in January 2019. This was part of the government’s efforts to promote renewable energy sources over fossil fuels, although extraction permits were not affected by the ban.