In recent years the gas market - like that of electricity - has sustained profound changes due to the liberalization process, which has allow it to change over from the previous Eni monopoly to the current situation. This evolution of the system was dictated by the need to create a sole European market, with the players in this sector competing freely with one another on the Old Continent.

To this end the European Union passed the Directive 98/30/EC, which establishes common rules for the internal natural gas market and which has been assimilated in Italy by the so-called Letta Decree (Italian legislative decree 23/05/2000 that takes its name from the minister of industry of the time). With this measure, the integrated gas companies were forced to manage the various activities of the production chain by breaking up companies, from procurement (production and imports) to transport, distribution and sales. This process has promoted multiplication of the players at the various levels of the production process. Transport and distribution, on the other hand, still remain under the control of just one company since they benefit from the characteristics of a natural monopoly and are regulated by the Authority.

The Letta Decree also envisaged that owners of the transport and distribution networks be obliged to guarantee - initially just to the Eligible customers and then to all users starting in 2003 - access to the networks terms being equal.

To ensure a gradual opening from the demand side, the Italian decree initially distinguished all of the users between eligible customers able to enter into supply contracts with any producers and admitted directly to the transport and distribution networks from non-eligible customers, namely all others. However, all customers have been considered eligible since 2003.

Actually, Law 481/1995 had established the Authority for Electrical Energy and Gas even before this European directive was assimilated. Since April 1997 it has been regulating the sectors of its jurisdiction, controlling proper operation of the market and playing both a consulting and proposal-making role with Parliament and the government.

Afterwards, Directive 03/55/EC set 1st July 2007 as the expiration date for liberalizing the market. Within this date all domestic markets must have adapted their systems to a free European market perspective. This directive was partly assimilated in Italian legislation by way of the so-called Marzano Decree (law of 23 August 2004). One thing to be pointed out amongst the various provisions this latter decree envisages is a certain attention paid to the safety of the storage and the necessary promotion of competition. The problem of storage and safety of the supplies has not yet been solved in Italy, and management has often (even recently) drawn the attention of the Authority. Something else to stress is that the Marzano Decree had already contemplated an incentive for the companies to multiply the routes of access of the gas to Italy both via pipelines and via LPG regasification terminals.

As of today, a few uncertainties pointed out by the Authority still weigh on liberalization of the sector. They derive from the heavy barriers of entry into this market, the characteristics of the industry's contracts and the predominant position of the incumbent, Eni. These are factors that prevent new players from entering at the various production chain levels on the one hand and, on the other, the formation of economic conditions favourable for a free choice of the end user as far as distributors and suppliers are concerned.

Page updated 4 August 2011