* Prosecutors: Cosentino, mob controlled local petrol market
* Cosentino had "stable relationship" with mafia clan
* Employees of Italian unit of Kuwait petrol firm also held
By Amalia De Simone and Steve Scherer
NAPLES, April 3 (Reuters) - Italian police arrested a former member of Silvio Berlusconi's government, accusing him of colluding with the mafia to quash competition against his family's petrol distribution business near Naples, officials said on Thursday.
Nicola Cosentino, an undersecretary in the Economy Ministry from 2008-2010 and the ex-boss of Berlusconi's party in the region around Naples, was arrested along with 12 others on suspicion of extortion and unfair competitive practices.
The Italian mob has always sought alliances with business and political leaders, even at the highest levels.
Seven-time Prime Minister Giulio Andreotti was acquitted of mafia charges, but found to have had ties to the Sicilian Mafia's top bosses before 1980. Berlusconi himself has been investigated, though never tried, for ties to organised crime.
In a statement, Naples anti-mafia prosecutors say Cosentino, his two brothers Giovanni and Antonio, and two brothers of mob boss Antonio Zagaria set up a "criminal system" to control the local petrol distribution market.
Cosentino used his political sway in local administrative offices to favour his family business and create bureaucratic obstacles for the competition, while the mob intimidated and extorted petrol distributors not owned or supplied by Cosentino's company, prosecutors said.
Cosentino had a "stable relationship based on common interests" with members of the local mafia, known as the Casalesi clan, prosecutors said in a statement released after the arrests.
Two Cosentino lawyers did not immediately respond to calls for comment.
Among those arrested on Thursday were two employees of the Italian unit of Kuwait Petroleum International (known by its trademark Q8), which refines and distributes petroleum products around the world for the state of Kuwait.
The employees were complicit in favouring the Cosentino family business, prosecutors say. The company had no immediate comment, but said it planned to release a statement later.
This is Cosentino's second arrest for mafia charges in a year. After losing parliamentary immunity, he turned himself in for separate charges in March of 2013. He was later put under house arrest and then released in November.
That trial is ongoing and Cosentino has denied any wrongdoing.
Mafia groups in the southern regions of Campania, Calabria, Apulia and Sicily continue to use violence and threats to control their local economies, and they do not hesitate to threaten officials who refuse to cooperate.
Threats against local government officials have risen 66 percent since 2010, when the figures were first collected, according to a report published last month. (Writing by Steve Scherer; Editing by Raissa Kasolowsky)