MILAN, July 2 (Reuters) - A summer price cut promotion for motorists by Italy’s Eni has proved successful enough to push up prices for diesel across the entire Mediterranean oil market and left the company scrambling for more fuel.
Five million Italians rushed to Eni forecourts last weekend to take advantage of a special summer discount sending petrol and diesel sales there up five times, Italy’s biggest oil and gas group said on Monday.
Further afield form Italy the offer lead to a rise in spot premiums on diesel to a six week high in the wholesale market in the Mediterranean region.
With the 20 percent discount offer launched in June, Eni is bucking a falling trend in car fuel demand across Italy where petrol consumption dropped 11.3 percent and consumption of diesel for road vehicles of fell 9.9 percent in the first five months of 2012, according to data from refining industry body Unione Petrolifera.
“In the third weekend (of the promotion), Eni has registered a new record inflow of consumers to its stations,” the company said in a statement.
Under the promotion running from June 16 to September 2, Eni has cut the price of petrol and diesel on weekends for customers who use a self-service option when filling up their tanks by about 02 euro per litre, which saves 10 euros on every 50 euros.
Eni says it will sell car fuel even below cost during the offer at its about 3,000 stations across Italy to help Italian customers, hit by austerity measures as the country seeks to stave off the debt crisis, to get “back on the road.”
Traders said Eni rushed to secure some auto fuels late last week on the wholesale market as the jump in sales at pump drew down fuels from its tanks and the level nearly fell below stocks that are mandated by the International Energy Agency (IEA).
“They need to buy some cargoes for the system. Everything goes very quickly,” one trader, who is familiar with Eni’s discount marketing, said. “And they need to keep the stock above certain level to meet regulation.”
In the wholesale market, spot premiums on diesel in the Mediterranean DL-CIFD-MED reached around $30 a tonne to benchmark ICE gasoil futures late last week, the highest since mid-May, compared with a $22 premium in late May. (Reporting by Svetlana Kovalyova in Milan and Ikuko Kurahone in London, editing by William Hardy)