Italy plans to nationalize oil refinery of Russia’s Lukoil in Sicily

Rome: Italy is considering the nationalization of an oil refinery owned by Russian energy giant Lukoil and located in the city of Priolo on the island of Sicily, with the country’s cabinet expected to decide on the issue on December 1, Italian newspaper La Repubblica reported on Tuesday.

The measure is aimed at saving the plant in connection with the eighth package of EU sanctions against Russia, which provides for the gradual introduction of an embargo on Russian oil imports, starting from December 5, the news agency reported, adding that Lukoil’s plant in Sicily refined Russia’s Urals oil.

Last week, Italian Industry Minister Adolfo Urso said the government was considering all existing options to save the Priolo plant, including its possible nationalization. Other solutions include providing additional guarantees by Italian export credit agency SACE for the purchase of oil outside Russia and selling the refinery to a third-party investor.

Rome is also discussing a possible appeal to the European Commission with a request that the embargo be postponed on the example of Bulgaria.

Nationalization is the last option to be taken if all the others fail, Urso told Italian newspaper La Sicilia.

Since the start of Russia’s military operation in Ukraine on February 24, the European Union has introduced eight packages of sanction against Moscow. The sixth package provided for the gradual introduction of an embargo on Russian oil imports, while the eighth package also included a legislative basis for setting a price cap for its maritime shipments to third countries. The price cap is scheduled to take effect on December 5, 2022, for crude oil and on February 5, 2023, for refined products coming from Russia.