Italian Oil Royalties Bring Modest Benefits to Affected Municipalities

Oil royalties in Italy are payments made by hydrocarbon producers to the State and regions for extracting hydrocarbons on national territory. According to Law 99/2009, these producers must pay a total of 10% of the value of onshore gas and crude oil produced, which is split between the State (30%), ordinary-status regions (55%), and local authorities (15%). For Basilicata and other southern Italian regions, however, the State's share is transferred in full to the relevant region.

Basilicata, where around 80% of Italy's oil is extracted, receives significant funds each year from private operators like Eni, Shell, and Total. Between 2008 and 2024, Basilicata received 86% of total payments made in Italy, amounting to over €2 billion. In 2025, Eni alone paid royalties totaling over €6.6 million to six municipalities affected by oil extraction activities.

A recent study published in the Italian Journal of Economics, Demography and Statistics found that around 90% of total municipal royalties go to just four small or very small municipalities. These municipalities are characterized by significant population decline and have a significant economic impact on their budgets. For example, the municipality of Viggiano received €8 million in 2024, which corresponds to approximately €2,500 per capita per year.

The study highlights that there has been a slow and partial improvement in the conditions of municipalities receiving royalties compared to those not receiving them. However, it also reiterates the need for further investigation, particularly regarding the issue of higher expenditure on social services in beneficiary municipalities.