Enel and Eni’s support for Meloni

Following on from fuel, it is now the turn of electricity: Plenitude, a company within the Eni Group, has announced an offer, effective from 1 October, featuring a 30 per cent discount and a price cap for two years. Enel has responded by relaunching an offer available since April, featuring a 50 per cent discount valid for two years. According to the company based on Viale Regina Margherita, this is the most competitive offer among the major providers and represents a saving of 200 euros a year compared with current rates. The energy component, which reflects wholesale procurement costs, is capped at 108 euros/MWh, which is even below current wholesale market rates.

What is happening on the energy markets? Two phenomena are occurring simultaneously. On the one hand, larger operators clearly see a commercial opportunity in the possibility of launching offers that are effectively below cost, with which to attract customers. The reasoning is that losses downstream can be offset by higher profits upstream (this applies both to the extraction and refining of crude oil and to the production and wholesale of electricity). On the other hand, the state-owned giants are distancing themselves from a fierce controversy that has dragged on for months, in which they found themselves in the dock accused of profiting from the Hormuz crisis. Clearly, Giorgia Meloni’s repeated calls for them to demonstrate a greater sense of responsibility towards a country in difficulty have not fallen on deaf ears. This two-pronged approach—which also highlights the rivalry between the two groups—is likely to leave two groups of dissatisfied parties: their rivals, who are unable to match the prices offered by the major players, and larger companies, given that these offers are currently reserved for households and retail customers. From a political perspective, however, Eni and Enel have solved a problem for Meloni, who will now be able to focus any public aid on businesses, adding another building block to her campaign ahead of the elections.