Eni Shares Drop for Fifth Consecutive Day as Italy Mulls Windfall Tax
Market Reaction and Government Policy Developments
Eni Share Performance
MILAN, Aug 27 (Reuters) - Shares in Italian oil and gas group Eni were down for a fifth consecutive day on Thursday amid speculation that the government could impose a windfall tax on energy companies to help finance fuel-price cuts in response to the U.S.-Iran war.
• The stock was down 0.7% at 1000 GMT in Milan morning trading, bringing losses since the Aug. 20 closure to more than 6%.
Comparison with Broader Market
• Eni's shares were underperforming a 0.4% loss recorded by the Milan blue-chip index, while the STOXX Europe 600 index for oil and gas group was slightly positive.
Performance of Other Italian Energy Groups
• Other Italian energy groups were also falling on Thursday, with gas distributor Italgas shedding 1.4% and the country's biggest utility Enel losing 0.8%.
Political Debate on Windfall Tax
Coalition Split
• Italy's ruling coalition is split on whether to impose a windfall tax on energy companies, with the far-right League supporting the proposal and the more moderate Forza Italia seen as opposing it.
EU-Wide Discussions
• Italy and five other European Union countries this week called for the 27-nation bloc discuss in September a mechanism to tax profits booked by energy companies amid the disruption in the Strait of Hormuz.
Government Measures on Fuel Prices
Extension of Excise Duty Cuts
• Italy's cabinet on Wednesday extended until the beginning of September a cut in excise duties on diesel, with the funding partly coming from advance payments of taxes due from large energy companies.
Potential Future Measures
• When these cuts expire, the government may introduce more targeted measures to ease fuel costs only for lower-income households, Prime Minister Giorgia Meloni's office said earlier this week.
(Reporting by Francesca Landini, editing by Gavin Jones)