AGCM

All of the companies agreed to cease publishing recommended prices and make-up differentials, considered by the Authority to be an exchange of information conducive to parallel pricing. In addition, each company presented measures that, taken as a whole, will introduce important structural changes to make the market more competitive by facilitating the entry of new competitors to the fuel distribution industry.

The commitments foresee incentives for self-service facilities where prices will be lower than those at full-service outlets.

In particular ENI, the market leader, undertook to set its pre-pay self-service (Iperself) fuel prices 6 cents lower than the full-service price. Every two months it will modify that discount so as to ensure the differential with the EU average is eliminated, even going lower than that average should the differential between EU 14 and full-service prices be less than 5 cents: the Iperself price will in any case be discounted by at least 5 cents.

Furthermore, the measures proposed by the oil companies include making available logistical facilities and a proportion of product to third parties and the opening of the market for the entry of supermarket chains.

The commitments proposed by the companies at the start of the investigation were further extended following the results of the market consultation carried out by the Authority.

The Authority also approved a submission to be sent to the Government and to the Regions calling for the distribution network to be truly liberalized by way of the bill under discussion in the Senate and for measures to be adopted to make logistical infrastructure available to  new market entrants if they are not fully integrated.

The following are the specific commitments presented by the companies.

PROMOTION OF SELF SERVICE OUTLETS BY DISCOUNTS COMPARED WITH FULL-SERVICE

This measure, with varying characteristics, was proposed by ENI, API/IP, Esso, Kuwait, Total, Shell and Tamoil. Specifically:

ENI – For pre-pay self-service (Iperself) at 1000 service stations (3000 by the end of 2009) it will immediately apply a discount of 6 cents per litre compared with the full-service price when the outlets are closed, so as to eliminate the differential with the European average. Every two months it will check that its Iperself price at least matches the EU average. Moreover, with the same frequency, ENI will check by how much the full-service price exceeds the EU 14 average: if the differential is less than 5 cents, the Iperself price will in any case be discounted by 5 cents compared with the full-service price and will thus be lower than the EU average.

Api/IP - Over three years, self-service outlets will be increased from 5% to 12.5% of the total. The discount compared with the full-service price will increase from the current 2.1 cents to 2.5 cents.

Esso - For two years, it will increase the self-service discount by at least 0.4 cents. Self-service outlets make up 50% of Esso's network.

Kuwait - Over three years, it will expand its network of Automat service stations which will offer a minimum discount of 3.5 cents compared with the full-service price.

Shell - Mixed-service outlets will grow from 93 to 150 by the end of 2008.

Total - It will install pre-pay facilities at all outlets managed by supermarket chains (up to 370 in the next three years). In low-cost service stations yet to be built, Total will apply a discount of 3-5 cents compared with the full-service price; it will extend its low-cost network and the number of self-service outlets.

MARKET OPENING TO SUPERMARKET CHAINS

Eni, Kuwait, Shell, Tamoil and Total presented commitments aimed at facilitating the entry of supermarket chains into fuel distribution.

ENI - While the investigation was proceeding, the company already reached an agreement with Auchan and undertook to supply a further ten service stations; if these are built at the supermarket chain's expense, they will not be subject to an exclusivity clause. ENI further declared its availability to sign similar agreements with other operators.

Kuwait – The company has committed to exploring forms of collaboration with supermarket chains and in its own service stations located in shopping centres it will accept the supermarket chains' credit and loyalty cards.

Shell - Has undertaken to open 20 Shell or co-branded service stations at supermarket outlets by the end of 2009. It will negotiate supply contracts with supermarket operators that have their own service stations.

Tamoil - For three years, it will give supermarket chains first refusal on all free outlets (new or with expired contracts); there are estimated to be about 370 of these, all with pre-pay facilities.

Total - Has committed to reach agreements with the supermarket chains, offering the possibility of installing low-cost own-brand service stations at supermarkets.

OPENING OF FACILITIES FOR USE BY THIRD PARTIES OR MAKING AVAILABLE PROPORTIONS OF PRODUCT

The following companies presented commitments to allow third parties to use logistical facilities: Api/IP, ENI, Erg, Esso, Kuwait and Shell. Tamoil and Total, instead, committed to making available a proportion of their product to independent third parties.

Api/IP – For five years, it will reserve for third parties 10% of the storage facility to be built at Barletta, for a total of 65-70,000 cubic metres p.a.

ENI – For three years, it will reserve for third parties 20% of the depots in Ortona, Vibo Valentia, Palermo and 10% of Gaeta for a total of 507,000 cubic metres p.a.

Erg – Will make available to third parties 10% of the capacity it controls at the Sigemi and RdR facilities for a total of approximately 240-245,000 cubic metres p.a.

Esso – 10% of the Naples depot (around 190,000 cubic metres p.a.) will be reserved for third parties indefinitely.

Kuwait - For two years from July 2008, Kuwait will guarantee transit of a maximum of 80,000 tonnes p.a. of petrol and diesel at the Naples depot, including existing agreements which cover half of this quantity.

Shell - Will make Sigemi and Silone systems available to third parties.

Tamoil – For five years, will reserve for third parties up to 20% of petrol and diesel production capacity at the Cremona refinery (estimated at about 500,000 cubic metres).

Total - Until 2010, will make available to third parties about 100-130,000 cubic metres of product at its Rome refinery.

Rome, 20 December 2007