Dec. 30 (Bloomberg) -- Italy will raise electricity rates for households by an average 3.8 percent in the first quarter, following a surge in the price of oil.

Oil sold in New York has risen almost 60 percent in the past year. Natural gas, the fuel used to produce more than half of Italy's electricity, tracks the price paid for petroleum. Italy imports more than 85 percent of the oil and gas needed to power the country, the Authority for Electricity and Gas said in an e-mailed statement late yesterday

The Italian energy regulator's benchmark price for natural gas, published to help customers choose their supplier, will increase 3.4 percent, the Milan-based authority said.

Higher power prices will mean the average family will spend 16 euros ($24) more a year on electricity and an average of 32 euros more on gas. The power-price increase equates to 16.51 euro cents per kilowatt-hour.

Enel SpA is Italy's biggest power company. Most of the country's natural gas is supplied by Eni SpA.

To contact the reporter on this story: Adam L. Freeman in Rome at Afreeman5@bloomberg.net

Last Updated: December 30, 2007 05:38 EST