Business

16 Mar 2022, 16:21 PM

STA, 16 March 2022 - The crisis situation in Ukraine is bringing uncertainty into the operations of all business entities and deepening the crisis due to high energy prices, the strategic council for energy transition at Slovenia's Chamber of Commerce (GZS) said on Tuesday, adding that there was no energy deficiency yet, but prices were highly volatile.

GZS head Aleš Cantarutti said that the current tense geopolitical situation in Europe had only deepened the energy crisis, as energy price hikes were also being translated into high transport prices and limited access to raw materials.

He added that Slovenia's latest energy crisis relief legislative package was "a plaster on the wound," but "energy price hikes since September last year are much higher than the aid foreseen, which does not take into account the damage actually suffered by companies".

Industry representatives pointed out that their strategic plans were geared towards decarbonisation, increasing energy efficiency and self-sufficiency, but that in such an extremely volatile environment, they are being forced to make very short-term decisions.

Slovenian companies are already deciding on a daily basis whether to operate at full or reduced capacity, or even to temporarily halt production because of increasing costs, they added.

The GZS's strategic council for energy transition also expects the government to follow EU directions to tackle the energy crisis and respond immediately with additional measures and support for the economy.

They expressed support to changes to the model of forming electricity prices to reduce dependence on gas prices, which have been pushing electricity prices up.

In the long term, the GZS wishes for the construction of facilities for renewable energy sources to be considered "public interest", as building such facilities has been a big problem in Slovenia.

As regards the measure to exempt all consumers from the payment of network fee, the participants of Tuesday's meeting highlighted the liquidity issues on the distribution side and expressed concerns about the stagnation of planned investments in electricity networks.

Meanwhile, the strategic council and Infrastructure Ministry State Secretary Blaž Košorok expressed satisfaction about Slovenia being a member of the European Network of Transmission System Operators for Electricity (ENTSO-E), which ensures a safe and secure energy supply.

They also discussed the impact of the planned integration of Ukraine's electricity system into the EU system. They assessed that such an operation entails certain technical, communicational and economic risks, as the country is currently at war and the infrastructure is damaged.

15 Mar 2022, 11:25 AM

STA, 15 March 2022 - While the government decided to cap the prices of the two best-selling petrols, regular and diesel, for a month starting today, for heating oil only a temporary regulation of margins had been introduced, so the price went up by more than 24% today.

The price of heating oil went up from EUR 1.018 a litre to EUR 1.264, which is a 24.2% rise.

In the face of rising energy prices, the government introduced a temporary regulation of margins for distributors of heating oil at the start of the heating season in November 2021. Initially it was introduced for three months, and then extended by another three months in January.

Since February, excise duties on electricity and fuels, including heating oil, have been reduced to the lowest possible rate. But this does not necessarily mean lower prices, as the prices of raw materials went up significantly after Russia's attack on Ukraine.

Last November, when the margins were reduced, the price of heating oil dropped below one euro per litre. Then it rose somewhat and has been just over a euro this year. On Monday, it was EUR 1.018 a litre.

Meanwhile, the price of regular petrol is now capped at 1,503 per litre, about six cents below the lowest price at the pump on Monday, and diesel at EUR 1,541, roughly 13 cents cheaper. The new regime will be in place for at least 30 days.

15 Mar 2022, 11:22 AM

STA, 14 March 2022 - The prices of the two best-selling petrols, regular and diesel, will be capped for a month starting today. Regular now costs 1,503 per litre, about six cents below the lowest price at the pump on Monday, and diesel is capped at EUR 1,541, roughly 13 cents cheaper.

The price cap was reintroduced by the government on Monday to arrest the surge in petrol prices following Russia's invasion of Ukraine, which led to rising global oil prices.

"The aim is to calm the situation on the motor fuels market," Economy Minister Zdravko Počivalšek said.

The price was capped based on calculations taking into account the seven-day representative average of prices that the Infrastructure Ministry sends to the European Commission.

The situation will be monitored during the next 30 days and the government will take further action if necessary.

The newspaper Finance assessed the government's decision will push fuel retailers into the red for at least this week.

Its calculations show that retailers are to lose more than 10 cents per litre of diesel sold and around 5 cents per litre of regular. Other costs included, the loss is even higher.

Since the demand at stations along the Italian border has now increased because the prices are much lower than in Italy, the losses of these stations will be even higher.

Retailers have so far been reserved in their reactions. OMV Slovenija told Finance that premium diesel had been removed from sale because its sale was no longer commercially viable.

Meanwhile, hauliers are happy with the capped prices, as fuel costs had accounted for a record 30% of all their costs after fuel prices went up by almost a third since the start of the year, according to Robert Sever from the Chamber of Commerce and Industry (GZS). Now they are down to 15%, he told the STA.

Finance has also calculated the effects of the government's decision on state revenue from excise duties on fuel. The state is to receive one cent fewer per litre of petrol, which is still one cent more than two weeks ago. For diesel the drop is two cents per litre, which is still one cent more than two weeks ago.

14 Mar 2022, 14:08 PM

STA, 14 March 2022 - The government will adopt a regulation today to determine the maximum prices of fuel at service stations, Prime Minister Janez Janša told MPs, announcing reintroduction of regulated fuel prices from Tuesday.

Janša made the announcement in response to a question from Janja Sluga, the head of the group of unaffiliated MPs, about the government's moves in the face of energy and food price hikes.

The same pricing mechanism as had been in place until April 2016, when the first round of price liberalisation took place, will be used to calculate the prices. The government will not allow for any speculation on the fuel prices market, Janša said.

The move comes after a group of opposition and unaffiliated deputies filed a bill on regulation of prices of petroleum products last week.

Janša said the government had introduced several measures in the face of rising energy price, noting that electricity bills, which users were getting these days, were significantly lower.

"The government has suspended the paying of network fees and some other levies to significantly lower the expenses for the people and it will stay this way for a while," Janša said, adding that aid had been allocated to the most vulnerable groups.

As for the rising fuel prices, he said that panic had been caused, which had resulted in daily sales going up sixfold. He stressed there was no need for panic and that fuel supplies were sufficient.

Russian oil represents 12% of global supplies, and this can be quickly replaced, he said.

The government had been warning fuel retailers to disperse their sources but they still mostly signed contracts with Russian oil companies "because some traditions die hard and connections work", Janša said.

The government fully liberalised the fuel market in 2020, so fuel retailers have been free in setting the prices for all types of fuel since 1 October 2020.

In the face of rising energy prices and the then-upcoming heating season, the government introduced a temporary regulation of margins for distributors of heating oil in November 2021. Initially it was introduced for three months, and then extended in January.

 

09 Mar 2022, 10:24 AM

STA, 9 March 2022 - Chemical company Cinkarna Celje, which specialises in titanium dioxide production, posted a net profit of EUR 33.2 million for 2021, a year-on-year increase of 75%. Driven by exports, sales rose by 12% to EUR 192.5 million, according to an unaudited report released on Wednesday.

Profit before income tax, depreciation and amortisation (EBITDA) was up by 58% to EUR 51.8 million and operating profit (EBIT) surged by 77% to EUR 40 million.

The company says the increase in sales was driven by robust demand in all markets and the total value of exports reached EUR 175.1 million, up 11% year-on-year.

"There is currently a shortage of titanium dioxide supply on the market, which is reflected in year-on-year increases in prices," the press release says.

While significantly higher prices of titanium dioxide in Asia have generated higher demand for products from western multinationals and local producers, input-side pressure also increased, driving up the prices of raw materials.

Going forward, the company sees "high uncertainty" due to the current geopolitical situation. Higher energy prices in Europe than in Asia and North America "could have a stronger impact on the competitiveness of the supply of European producers," it says.

However, the company has a significant cash buffer, with cash assets rising by 59% to EUR 59.7 million at the end of the year.

08 Mar 2022, 14:43 PM

STA, 8 March 2022 - The government will discuss rising fuel prices on Wednesday with two ministers assuring reporters on Tuesday that the government will step in to secure sufficient supplies from commodity reserves and a sustainable pricing policy.

Slovenia has sufficient reserves not to be hurt by somewhat prolonged disruption to supply of oil derivatives, Economy Minister Zdravko Počivalšek said during the government's visit to the north of central Slovenian region.

He spoke as prices at the pump hit all-time highs today as a result of the impact of the war in Ukraine. Long lines formed at service stations yesterday as people rushed to fill up and some pumps run out of fuel.

"In line with the intervention from the commodity reserves, we will decide how to ensure a sustainable pricing policy in the coming month. In any case, the state will make sure that the prices won't explode," he said.

The government will intervene if necessary both in terms of volumes and prices. A session dedicated to this issue will be held on Wednesday and the Economy Ministry is working on various scenarios for the future, Počivalšek said.

The Commodity Reserves Agency told the STA that it held a reserve of petroleum products that significantly exceeded the 90-day average consumption in Slovenia. The exact quantity of commodity reserves, including petroleum products, is confidential.

Prime Minister Janez Janša, joined by Počivalšek and Infrastructure Minister Jernej Vrtovec, held a meeting with the country's leading fuel retailers on Monday evening to discuss the stockpiles and supplies of oil derivatives over the next weeks and measures to ensure undisrupted supply even if supplies from Russia are suspended.

Počivalšek said the retailers briefed them on their reserves, supply flows and issues. "We in turn told them how we see a sustainable pricing policy in the future."

Meanwhile, Defence Minister Matej Tonin described an embargo on gas and oil imports from Russia as the most powerful tool available to the West to stop Russian war in Ukraine as it would get to the "very heart" of its financing.

Such a move would be the quickest to stop the war. Thus, Slovenia's position is that the sanctions should be stepped up to the maximum at once "even if it hurts us a little".

Given that Russia provides about 12% of global oil supplies, Tonin is confident that Slovenian oil traders can find new suppliers.

Slovenia could weather the period of delays and disruption to supply with oil reserves. "With reserves, we give oil traders room for manoeuvre to secure other sources," said Tonin.

Speaking of gas, he said there had been assurances from those responsible EU stockpiles were sufficient to get through the winter and spring as efforts were under way to replenish the stocks to the maximum extent.

Production could be stepped up by some European countries such as Norway while the EU is also in talks with the Arab world to increase supplies, he added.

The Chamber of Agriculture and Forestry urged the government today to secure farmers fuel to work the land from commodity reserves in case of disrupted supplies, warning that the fallout from the war was huge already.

08 Mar 2022, 10:27 AM

STA, 8 March 2022 - Prices at the pump surged on Tuesday with both diesel and regular petrol reaching all-time highs due to high prices of oil on the global markets and the impact of the war in Ukraine.

Regular petrol cost between EUR 1,555 and EUR 1,564 and diesel was between EUR 1,662 and EUR 1,670 depending on provider. Along motorways prices are even higher, by a few cents on average.

Prices have been rising for several weeks but have now surged by up to five cents per litre in a single day and in some cases even more.

In anticipation of the price hike, there were long queues at service stations yesterday evening as people rushed to fill up, leading to fuel shortages at some smaller service stations.

Slovenia fully liberalised fuel prices in October 2020. Before that, only prices along motorways were fully liberalised.

Fuel retailers have said they have sufficient reserves and do not expect supply disruptions in the coming days.

Senior government officials held a meeting with top executives of the three largest fuel retailers in the country - Petrol, OMV and MOL - last night.

The government did not reveal the details of the talks beyond saying the discussion revolved around reserves and supplies in the coming weeks, and supplies in the event fuel shipments from Russia are interrupted.

07 Mar 2022, 20:48 PM

STA, 7 March 2022 - After media reports that fuel prices will go up significantly tomorrow, queues formed at service stations around the country. Some stations even temporarily ran out of diesel fuel. According to the newspaper Finance, the price of diesel could reach a new record tomorrow, at EUR 1.65 a litre. PM Janez Janša said there was no need to panic.

Oil prices had been going up even before Russia attacked Ukraine but they had been rising even faster since, also because of sanctions imposed on Russia and fears of disruption to the supply chains.

The announcement that the US and European countries may impose a ban on oil imports from Russia pushed them even further up.

In Slovenia, petrol prices have been gradually rising for several weeks and currently stand between EUR 1.45 and EUR 1.50 per litre.

Finance has calculated, using a formula that had been used to calculate prices until autumn 2020, when the market was liberalised, that the price of diesel could jump to around EUR 1.65 per litre tomorrow, a record, so filling a 50-litre tank would cost almost EUR 10 more.

The price of regular is expected to go up to just over EUR 1.55.

Janša wrote on Twitter tonight that Slovenia had enough fuel supplies so there would be no shortages. "Moreover, in case of radical increase of retail prices the government will take addition mitigation measures. There is no need to panic."

The biggest fuel retailer in the country, Petrol, said there had been increased demand at its stations around the country this afternoon, especially for diesel. It said this was the "consequence of an exaggerated response of consumers to alarming media reports of expected fuel price hikes because of the situation on the global markets".

Subsequently, some smaller stations even ran out of diesel fuel, but Petrol said additional supply had been provided and that no disruptions were expected tomorrow either.

Petrol told the STA the prices of energy on global markets had been volatile and unpredictable as it is, and Russia's current military activities in Ukraine created even more insecurity. The prices of fuel on global markets have already gone up and everyone will feel the consequences. "Because of these factors it is impossible to forecast the movement of retail prices," Petrol said.

A similar response came from OMV Slovenija, which said its supply had not been disrupted today and that the Slovenian market had sufficient supplies of fuel.

The government confirmed a EUR 200 million package of aid for households and companies to mitigate energy-price hikes at the end of January, also including lower excise duties on heating oil and petrol. The measure entered into force on 1 February and will be in place until the end of April. The government said the excise duties had been reduced to the lowest possible level.

For petrol it currently stands at EUR 0.35901 per litre and for diesel at EUR 0.330.

07 Mar 2022, 11:54 AM

STA, 7 March 2022 - Slovenia exported EUR 3.5 billion worth of goods in January, or 20.5% more than in the same month last year, while imports surged by 52.1% to EUR 3.9 billion, the Statistics Office reported on Monday. A trade deficit of EUR 400 million was thus recorded for the exports-to-imports coverage of 89.2%.

In January, exports to the EU member states were up by 28.8% year-on-year to EUR 2.4 billion, while imports from these countries increased by 38% to EUR 2.4 billion.

Trade with the EU member states represented 68.5% of the total value of Slovenia's exports and 60.9% of the total value of imports.

Exports to non-EU countries in January were 5.7% higher than in the same month in 2021, to amount to EUR 1.1 billion, while imports from these countries surged by 80.6% to EUR 1.5 billion.

The Statistics Office noted that operations involving processing represented an important share of the value of trade with non-EU countries in January, with such transactions accounting for roughly two-fifths of all exports and nearly half of all imports.

More on this data

02 Mar 2022, 13:21 PM

STA, 2 March - After Slovenia's largest bank, NLB, acquired the Slovenian subsidiary of Russia's Sberbank, Sberbank's operations in Slovenia resumed today with NLB chairman Blaž Brodnjak reassuring clients they have "no reason to worry any more, open accounts at other banks or transfer assets to other banks". They have full access to their money again, he said.

"Sberbank is already part of the NLB group and NLB owns it. Business will be conducted absolutely normally today, cash withdrawals will be unlimited and all Sberbank clients can use NLB ATMs free of charge already," Brodnjak said after Sberbank was closed for two days, and transactions and money withdrawals for clients limited to EUR 400 a day.

There will be no major changes for the 40,000 Sberbank clients, as they will continue to use this bank and keep their bank cards, he added.

NLB will first change the name of the previously Russian-owned bank, which was on the verge of collapse after the Russian bank's European division was forced to suspend operations in the face of the Ukraine crisis.

Then the bank will be gradually integrated into NLB. Only after this process is concluded, which is expected to take over a year, will the bank accounts be transferred to NLB.

Some operative problems may still occur today as the bank reopens but customers should not worry about that, Brodnjak said.

"Sberbank has NLB's potential at its disposal today, and liquidity reserves of billions of euros, which exceed all deposits at Sberbank, have no burdens and can be accessed at any time," he stressed.

Sberbank has its own liquidity reserves as well and now it can also access those of the whole NLB group, he added.

"We will give as much money as necessary, but we are convinced there will be no more rush as of today."

Brodnjak would not reveal how much NLB paid for Sberbank beyond saying that the sum was "appropriate given the circumstances".

The takeover has already been approved by the Competition Protection Agency, which said it had issued a decision on the early implementation of concentration while taking into account the public interest in the Republic of Slovenia.

In line with the relevant law, the agency may exceptionally issue such a decision before authorising the implementation of concentration to a certain extent or under certain conditions.

The condition is that the entity demonstrates in the proposal for acquisition that such implementation is necessary in order to maintain the value of the investment or to provide services of general interest, the agency said.

NLB signed the agreement on the takeover of the only Russian-owned bank in Slovenia with the central bank on Tuesday to preserve the financial stability in the country in the face of sanctions against Russia.

With the acquisition of Sberbank, NLB again becomes the leading Slovenian bank, controlling some 30% of the market measured by total assets to leapfrog the Hungarian OTP Bank Group.

Brodnjak said he was proud to see NLB, which needed to be rescued in the past, assume the role of a rescuer.

Sberbank currently has a dozen branches in Slovenia and NLB will soon have 71. Brodnjak said it was too early to say how the acquisition would affect this number and the number of Sberbank staff in the future.

At the moment, no changes will be made, and the management will also stay the same. However, the NLB will strive to appoint a new supervisory board as soon as possible, he said.

02 Mar 2022, 07:51 AM

STA, 1 March 2022 - Slovenia's largest bank, NLB, has acquired the Slovenian subsidiary of Russia's Sberbank in a move that the central bank said would preserve the financial stability in the country after Russian-owned banks suffered a loss of trust due to sanctions against Russia.

"There were two options for the resolution of the Slovenian Sberbank: either it ceases operations and savers are compensated in accordance with guarantee scheme rules, or it gets a new owner," the central bank said Tuesday evening.

The sale means that Sberbank branches will reopen tomorrow after two days of closure and limited transactions for clients. "All Sberbank clients will conduct banking services without disturbances from tomorrow." [ed. Wednesday]

NLB has acquired Sberbank's equity as well as all assets, liabilities and clients. "This is a fast and effective solution for all clients who suddenly found themselves in a difficult situation," NLB chairman Blaž Brodnjak said in a press release.

"At the close of the transaction, Sberbank Slovenija will get a strong and committed owner who will ensure smooth operation with its capital and know-how," he was quoted as saying.

The decision was reached in agreement with the EU's Single Resolution Board, which determined that Sberbank's subsidiaries in Slovenia and Croatia were "failing or likely to fail due to a rapid deterioration in their liquidity situation," even as it decided no resolution was necessary for their Austrian parent, which will be liquidated.

SRB chair Elke König said the three decisions "protect financial stability and the depositors up to an amount of EUR 100,000 in Austria and with no limits in both Slovenia and Croatia."

"Today, we acted to protect the public interest and ensure financial stability. All of this has been done without having to use public funds, so not only are Sberbank's customers protected, the taxpayer is too."

The price of the NLB transaction has not been revealed. Central bank governor Boštjan Vasle told the TV show Odmevi that there had been significant interest by the largest and most important banking institutions. The Single Resolution Board picked the solution that satisfied the largest number of criteria.

Slovenian Sberbank is the only Russian-owned bank in Slovenia.

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