All Italian oil refineries, even the most efficient or most technologically advanced, risk closure amid narrowing margins and greater international competition that has eroded output by 24% since 2008, the president of Unione Petrolifera, Italy's principal downstream association, said Wednesday.
Italian companies active in the refining and downstream sectors have tallied up losses totaling some Eur7 billion ($9.61 billion) in the past few years, said Alessandro Gilotti, according to a transcript of a speech he gave to a parliamentary committee.
In the past three years, refineries in Rome, Mantova, Marghera and Cremona have been either been closed or been transformed into logistics hubs, while other refineries have suspended production or limited production lines to stave off thin margins and fierce competition from emerging markets.
The risk Italy faces is that of becoming dependent on imports not only for natural gas and crude supplies, but also for refined oil products, which would make Italy "even more vulnerable," Gilotti said. He called for the government to address the matter during the upcoming Italian presidency of the EU, starting July 1, in order to rebalance the competitive disadvantage currently being suffered when compared with Asia and the US.
Gilotti also urged legislators to slash red tape and the issuance of permits for those wishing to open up a refinery, a process which in Italy can take as long as five years compared to the six-month average timeframe in the rest of Europe.
"At the same time, it would be important to facilitate those that are trying to close down their activities," Gilotti said.
The UP executive said Italian energy consumption had dropped to levels last seen 20 years ago. Even so, fossil fuels will remain key to cargo transport and crude is expected by the association to remain the main source of energy for the next 20-30 years.
Italy needs to shut 4,000-5,000 gasoline stations to make the national supply network more efficient and because many existing ones do not comply with safety norms, Gilotti said.
Unione Petrolifera represents Italy's principal oil refiners and products distributors. Earlier this week it released data showing Italian refineries' output of petroleum products last year fell 12.1% from 2012 to 71.6 million mt on a drop in crude processing.
By Platts
