STA, 26 August 2022 - Despite more than doubling its revenue, Slovenia's energy group Petrol posted a net loss of EUR 1.3 million in the first half of the year as a result of fuel price regulation, the company said on Friday.

The group saw sales revenue rise by 126% to EUR 4.2 billion, a figure well above the target, on the back of increased volume sales of fuels and oil derivatives as well as price hikes.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) stood at EUR 48.6 million, down by 52% year-on-year and 64% below plans.

The net loss is a result of the steep drop in EBITDA that was caused by the price regulation measures in Slovenia.

The price regulation forced Petrol "to sell fuels at a lower retail price than the purchase price 90% of the time between 15 March 2022 and the end of June".

"The company's EBITDA loss of EUR 108.9 million in Slovenia was caused by the government's freeze on retail prices of petroleum products from 15 March to 30 April and the reintroduction of the cap on 11 May for a period of 90 days, which was lifted prematurely by the current government on 21 June," the company said.

The group's EBITDA loss in Croatia, where the price regulation has been in force since 7 February, stood at EUR 14.5 million.

Adjusted gross profit for the first six months of the year totalled EUR 245.4 million, down 5% year-on-year and 19% below plans. The positive contribution to gross profit growth due to the integration of the company Crodux Derivati Dva into the group was reversed by the impact of price caps in Slovenia and Croatia.

In 2021, Petrol posted nearly EUR 5 billion in sales revenue and EUR 124.5 million in net profit. In the first quarter of this year, the group was still in the black as net profit stood at EUR 32.4 million and was higher than the quarter-one figure in 2021.

Petrol's chief financial officer Matija Bitenc told the STA that the company was hoping to reach an agreement with the government on reimbursement of damages it incurred during the first wave of price regulation in spring, under the previous government.

"We incurred costs, sold more fuel, but we did not cover the purchase price," he said." A request for reimbursement has already been sent to the government. Several meetings with the finance and economy ministries have been held but a final agreement has not been reached yet.

He also warned that the uncertainty might have an impact on the company's credit rating. In March S&P put Petrol on watch with a negative outlook as it awaits information about how important Petrol is for the state.

"The rating agency has so far assessed that in the event of any problems the state would come to the rescue ... Today their view is slightly different and they are wondering if this is still the case," he said.

A meeting with S&P is scheduled for September, until which time they want to know to what extent the damage will be reimbursed by the state. "Having Petrol in poor financial shape is not good for anyone at this time, least of all for the taxpayers," he said.

With its current rating Petrol does not need bank guarantees to purchase oil derivatives, but if the rating is downgraded they would have to issue guarantees in the EUR 300-500 million range per month, he said.

The Economy Ministry told the STA there had been no final decision yet about compensation. If one is made, the government will first set the criteria for eligibility and require evidence.

"In recent months some oil companies have proactively sent 'notifications of damages' to the [ministry], but we do not consider these formal claims," it said.

Under the law on price controls, the government has the prerogative to decide whether to reimburse companies or not. It also decides on the appropriate means of compensation, either financial remuneration, tax benefits or other forms of financial incentives, it said.

STA, 23 August 2022 - The National Assembly unanimously passed on Tuesday changes to the VAT act reducing VAT on electricity, gas, biomass and remote heating from 22% to 9.5% between 1 September 2022 and 31 May 2023.

The changes come as part of efforts to mitigate the cost of living crisis with Finance Ministry State Secretary Tilen Božič telling MPs that the VAT cut will only fulfil its purpose if prices are regulated as well.

Initially, this was not incorporated in the changes, and the senior coalition Freedom Movement filed an amendment to that effect with the support of the coalition Left.

Under the amendment, prices will be regulated for the duration of the VAT reduction for products which will be regulated on 1 September 2022.

At the moment, this entails electricity and gas for households, small companies and users classified as protected, including schools and care homes.

Božič said the Infrastructure Ministry was conducting a study to see what additional measures, including price regulation, would further contribute to reducing heating bills. The study is to be completed by the end of the month.

The changes have been fast-tracked through parliament and enjoy the support of all parliamentary parties, even though some expressed regret that VAT could not be lowered below 9.5% and that it does not apply to food.

The opposition Democrats (SDS) filed an amendment under which VAT would be reduced to 5%, including for heating oil, although EU law renders this impossible.

Nevertheless, the SDS believes that Slovenia should declare a state of emergency in energy and reduce heating oil VAT.

"You're worried that this would not be in line with the EU directive. But of course it is in line if we act for the good of the citizens," said SDS MP Janez Magyar.

Božič said the government did not want to propose a solution that would not be in line with EU law. "At first, it would feel nice in our pockets, until we would have to pay it all back with interest. No such lunch is free."

The revenue shortfall from the reduction to 9.5% is estimated at EUR 130 million, while a reduction to 5% would mean an additional EUR 50 million less in budget revenue, Božič said.

On Monday, Prime Minister Robert Golob said that the government does not believe the reduction to 5% to be necessary because the cut to 9.5% will be accompanied by the freezing of prices for electricity and gas. He said the government would rather use budget funds to cut VAT on food, if necessary.

The opposition New Slovenia (NSi) also said it would support the changes. However, the party wants a more comprehensive approach by the government, for example reduced VAT for basic necessities, above all food, MP Jernej Vrtovec said.

The NSi wanted to file an amendment under which the VAT reduction would also apply to food and beverages. But because the changes address VAT reduction for energy products, the amendment was not discussed.

All three coalition parties expressed support for the changes, but junior coalition parties expressed some misgivings.

The Social Democrats (SD) said a reduction to 5% would be a maximum expense for the public finance and would prevent any later additional actions.

SD MP Soniboj Knežak regretted that a solution had not been found for heating oil. "I don't know if that was a bureaucratic lapse," he said about the EU directive and expressed the expectation that a solution will be found at the EU level by the start of the heating season.

Meanwhile, Miha Kordiš of the Left underlined the need to regulate prices if the VAT cut is to have the desired effect. He also said the Left wanted to see regulation of food and heating oil prices, as well as a fair tax reform by the end of the year.

STA, 7 July 2022 - Petrol, Slovenia's second largest electricity provider and fourth largest gas provider, will increase prices in September, following suit of the competition. Prices are expected to rise further next year.

The price of electricity at Petrol will be EUR 0.14145 per kWh in peak periods, EUR 0.08778 in off-peak periods with a flat rate of EUR 0.12804. The prices will be uniform for existing and new customers with loyalty club members eligible for a discount.

The average household will see their electricity bill go up by 13% or about eight euros per month.

Gas will set households back EUR 0.08779 per kWh, which is a 43% or EUR 24 per month increase for the average household.

Petrol is not the first provider to increase prices. Gen-I has already increased gas prices, raising the average household bill by a third and will raise electricity prices in August by 18% per average household.

ECE and Energija Plus have already increased prices, while E3 and Elektro Energija are doing so in July, increasing the average household's bill by a fifth or a quarter, respectively, according to calculations by the newspaper Večer.

According to the 2021 report from the Energy Agency, Gen-I held the largest market share among electricity providers at just under 21%, followed by Petrol at 15%, then ECE, Energija Plus and E3. Last year Petrol and E3 saw the largest market share growth, while ECE and Energija Plus saw the largest drop. At the start of this year Gen-I has purportedly gained the most after some smaller providers withdrew.

Even after the price increases Gen-I and Petrol remain the cheapest, followed by Elektro Energija, while ECE, E3 and Energija Plus are significantly more pricey.

Geoplin was the largest gas provider with a 43% market share, followed by Gen-I and Energetika Ljubljana with 12 and 11%, respectively. The fourth was Petrol, which along with Gen-I saw their market share grow the most after owners in apartment buildings are no longer considered commercial customers.

Petrol, Adriaplin and Gen-I were the most affordable providers, while Energetika Ljubljana, Plinarna Maribor and Energija Plus were the most expensive amongst the large providers. After the price increase Petrol will be somewhere in the middle.

Energy providers emphasise electricity prices on the stock market are almost six times higher than a year ago and the increase is even higher for gas.

Facing a difficult situation with no good prospects and a large demand, the providers expect prices to rise in the coming year to rates of the most expensive providers.

The government has announced measures to mitigate the energy crisis, but it remains unclear when the measures will be ready and who will take on the financial burden.

STA, 20 June 2022 - The prices of regular petrol and diesel will rise by nearly 20 cents a litre on Tuesday. Regular petrol will cost EUR 1.755 a litre, up from EUR 1.56, while diesel will cost EUR 1.848 a litre, compared to EUR 1.668 at the moment. The new prices will remain in place until 4 July, when they will be adjusted again.

Fuel prices in Slovenia have remained unchanged since May 11, when they were capped by the previous government amid rapidly growing energy prices.

Last week, the new government decided to reintroduce a system of margin regulation at service stations outside the motorway network, while completely liberalising the prices of fuel at pumps along motorways.

In response to the rising prices of fuel, the government also temporarily abolished several environmental taxes on fuel.

The expected price hike has resulted in a rush to petrol stations across the entire country, with many fuel retailers running out of fuel at the weekend and today.

STA, 20 June 2022 - As drivers are rushing to service stations in anticipation of a price hike on Tuesday, which resulted in some stations running out of fuel, Economy Minister Matjaž Han assured the public that there were sufficient reserves of fuel. This is not a major market disruption, but a logistical problem, he said, also announcing inspections.

Speaking to the press in Ljubljana on Monday, Han admitted that occasional shortages of fuel had occurred in some parts of the country over the weekend, and that this was also happening today.

The minister noted that distributors reported that sales had more than doubled, adding that nevertheless there should be no fears that Slovenia would run out of motor fuels, which was also being guaranteed by distributors.

According to Han, the problems are related to logistics, which is in part a normal occurrence ahead of announced changes in prices.

He, however, also noted that traffic had been heavy in Slovenia over the weekend due to holidays in the neighbouring countries, which had also slowed down the delivery of fuel to petrol stations.

The commodity reserves of petroleum are full, Han said, explaining that the state could release them only in the event of major market disruptions, which was currently not the case.

The minister noted that the state could not release commodity reserves to regulate prices of petroleum products, as the quantity of commodity reserves was required by the EU. "There are enough [reserves] for 90 days in case of any disturbances."

The ministry is closely monitoring the developments, and a meeting with distributors will be held today to clarify the situation.

What is more, market inspectors are on the ground to examine whether retailers comply with the current regulated price and to examine sales and stocks, and whether consumers are possibly being mislead, the minister said.

"If it turns out that there have been violations of law, our inspection services will take action," he said, adding that the first information will be available already this afternoon.

The demand for motor fuel has increased after the government last week adopted a decree that reintroduces regulation of prices of regular petrol and diesel outside of the motorway network for a year, and liberalises prices on the motorway network.

The decree that also suspended certain environmental duties that determine the final price of fuel ends the regulation that entered into force on 11 May and that set the price of regular petrol at EUR 1.56 and diesel at EUR 1.668 per litre.

"The price at petrol stations outside motorways will be set every 14 days under the model set out in the regulation," said Han, who expects that the prices on motorways will be similar to those in the neighbouring countries, despite the inevitable increases.

Considering the recent rise in petroleum and petroleum products and the still weak exchange rate for the euro, a significant rise in prices is expected on Tuesday despite the restrictions on margins and the abolition of certain excise duties.

The business newspaper Finance has calculated that the price of regular petrol in Slovenia will increase to EUR 1.74 and that of diesel to EUR 1.81 per litre. Han said that the official prices would be known around 5pm today.

Han also touched on aid to farmers and hauliers, saying that the precise measures to help hauliers have not yet been agreed, as the government was waiting for concrete proposals from the other side. Farmers are expected to be reimbursed for excise duties.

The minister announced that the government will reject all claims for damages due to price regulations filed by fuel retailers, noting that "we have no data or basis on which these claims have been filed."

"We will start talks with retailers today about how, if at all, the state will reimburse them retroactively," Han said.

The previous government had indicated it would reimburse the fuel trades for the loss of income from a period in the spring when prices were capped, but the previous economy minister had later said this would not entail automatic reimbursement.

STA, 19 June 2022 - Owners of motor vehicles are heading for Slovenian service stations en masse on Sunday as regular petrol and diesel prices are expected to rise considerably when a new pricing model kicks in on Tuesday. All three major fuels providers, Petrol, OMV and MOL, have experienced occasional shortages today.

Today's demand considerably exceeds the long-term daily average demand so individual service stations have had some minor shortages, fuel company Petrol told the STA.

In recent months, this has been the case primarily at the petrol stations where large fuel customers such as farmers fill up.

However, supply has already been increased to meet the demand, although increased traffic and occasional congestion on Slovenian roads, as well as time limits imposed on motorways for trucks carrying fuel delay deliveries.

Nevertheless, the largest fuel retailer said that they are well stocked so there is no fear of fuel shortages.

24ur.com news site meanwhile reported that their users from around the country have sent in information that diesel and petrol or both are not available at some Petrol and OMV Slovenija service stations, where signs have been put up saying "currently out of stock due to increased demand".

MOL Slovenija initially experienced no problems, but the situation has already deteriorated.

Demand is additionally driven by numerous tourists filling up as they are returning home from the seaside, especially from Croatia, which has higher fuel prices.

On Wednesday, the government decided to return on 21 June to a pricing model where fuel retailers' price margins at service stations outside motorways are regulated while prices of fuels sold along motorways will be fully liberalised.

The new regime, which Slovenia had until a few years ago before it gradually introduced full liberalisation, will be in place for a year.

The new regime brings to an end the regime the previous government introduced on 11 May that capped the retail price of regular petrol at EUR 1.560 a litre and diesel at EUR 1.668 for the entire country amid the increasing cost-of-living crisis. As a result, prices are currently much lower than in the country's neighbours, except Hungary.

STA, 16 June 2022 - Prime Minister Robert Golob has announced regulation of gas and electricity prices as possible additional measures to fight price hikes, adding that the government also intends to make public the prices of the basic food basket at individual retailers.

Speaking for the commercial POP TV and the public broadcaster TV Slovenija on Wednesday evening, Golob said that several measures were being planned when it came to the high electricity and gas prices.

He announced that legislation was in the works that would enable "regulation of electricity and gas prices also for households and all individual consumers, for example in multi-apartment buildings and the like."

Golob explained yesterday's government decision to regulate the prices of motor fuels outside the motorway network and re-liberalise them along the motorways for one year by saying that "consumers expect predictability and comparability with other countries."

"The system being introduced brings exactly this," the prime minister said, noting that EUR 150 million in claims from fuel retailers to be compensated for losses related to the government regulation had been filed in less than two months.

The prime minister said that such a model was unsustainable, and such retroactive claims are inappropriate, adding that the government would continue to negotiate with fuel retailers over this issue.

The largest Slovenian fuel retailer Petrol welcomed the announced abolition of full regulation of prices that has been in force since 11 May, and also from mid-March and the end of April.

The company said that the current model was disproportionate and unsustainable. "It only burdens retailers of petroleum products, who are forced to sell fuel below the purchase costs, every litre sold is a loss," it added.

The fuel retailer OMV Slovenija also commented on the damage claims, saying that it had not received any feedback from the relevant ministries so far. "We expect an invitation for a coordinating meeting from the government," the company added.

Golob also announced talks with food retailers. He noted that these had very different prices and margins, so the government would make it very clear where the prices of the basic food basket were low "and where they are obviously astronomical".

He noted that the government would not do negative advertising, but positive advertising for those who would demonstrate the lowest prices of the basic food basket and the lowest margins.

STA, 15 June 2022 - Prime Minister Robert Golob set out the first government measure to tackle the cost-of-living crisis on Wednesday, announcing a return to a model where fuel retailers' price margins at service stations outside motorways are regulated while prices of fuels sold along motorways will be liberalised. The new regime will kick in for a year on 21 June.

Oil prices have gone up from EUR 70 per tonne a year and a half ago to over EUR 120, which has not been reflected fully in retail prices, Golob said, adding that Slovenia had different price regimes during this period.

"We had a regime that forcibly introduced regulation of retail prices. That's why we now have millions [of euros] worth of claims for compensation of damages [from fuel retailers]. This regime is totally unsustainable," said Golob.

"Outside motorways the market unfortunately doesn't work. All the providers have almost identical prices all the time. If the market doesn't work a return to retailers' margin regulation makes sense," he said.

The government was looking to find a balance between market prices where "each one of us, the state, retailers and consumers, carry a part of the burden".

Under the new model fuel prices would be similar to those in Croatia, but below those in Austria or Italy. Given Tuesday's stock market prices, regular petrol sold outside motorways could go up to just above EUR 1.70 a litre and on motorways by up to 20% and more.

"We've been looking at how much our consumers can take," said Golob.

The previous government reintroduced regulation of prices of motor fuels in May, less than two weeks after it lifted previous price caps. Since 11 May, the maximum retail price has been set at EUR 1.560 a litre for regular and EUR 1.668 a litre for diesel. Wholesale prices have also been capped.

Golob said the government's position was that fuel companies' claims to be reimbursed for damages as a result of being forced to sell at lower prices were unwarranted, but added that more would be clear after meetings with them.

Economy Minister Matjaž Han said the government had to act fast as fuel prices affected everyone and the current regulation was causing the state a major shortfall which potential reimbursements to retailers could raise to hundreds of millions of euros by the year's end.

The government will also introduce some mitigation measures on 1 July, which it plans to adopt next week. Golob mentioned a 16% increase in the tax-free amount of commuting cost reimbursement, an increase in the reimbursement of excise duties for public passenger transport providers and a relief for farmers.

Today, the government temporarily abolished a number of environmental taxes, including the tax on CO2 emissions for diesel, petrol, heating oil and natural gas. This will be in place until 17 August.

Moreover, the cabinet abolished contributions for electricity production using high shares of renewables. This will be in place for a year at the longest. It also reduced to zero the energy efficiency duty.

Together with hauliers, the government will start looking for solutions to prevent fuel price increases from spilling over into higher prices of food and other commodities.

Measures to tackle rising food prices are to follow in June and those to deal with the rising cost of electricity and heating in the first half of July.

"There's enough time to take action. These measures will also follow the same principle as for petroleum products, that is predictability for all stakeholders," said Golob.

STA, 20 May 2022 - The energy group Petrol reported on Friday that its sales revenue in the first quarter of the year more than doubled year-on-year to EUR 1.94 billion, while net profit was up by 17% to EUR 32.4 million. The rise is largely attributed to the incorporation of the Croatian fuel retailer Crodux into the group.

In the first quarter of the year, the group's adjusted gross profit amounted to EUR 162.2 million, an increase of 18% year-on-year, Petrol said in a press release as it issued the quarterly report.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 65.6 million, or 21% more year-on-year, mostly due to the incorporation of Crodux and good results in electricity trading.

In the EBITDA structure, 37% was represented by fuels and fuel products, 13% by merchandise and services, 47% by energy and solutions and 3% by other revenue.

In the first three months of the year, the group sold 906,400 tonnes of fuels and fuel products, a year-on-year increase of 41%.

As a result of the incorporation of Crodux, the share of sales in Slovenia in the structure of fuels and fuel product sales decreased, whereas the share of sales in the South-east Europe markets increased.

Petrol said that in line with the law instructing the government to reimburse losses as a result of fuel price caps, the company had submitted a claim to the government amounting to EUR 51.3 million for the period from 15 March and 30 April.

The Economy Ministry responded to this, noting that the law gave the government this option not obligation. In line with it, the government "can determine an appropriate reimbursement", it said.

The government will decide on this reimbursement based on the standards and criteria yet to be adopted, the ministry explained.

Fuel retailers have been sending its estimates of the damage at their own initiative but "these estimates do not count as official claims, as legal requirements for them have not been met yet", the ministry said.

The Petrol group generated EUR 101.5 million in sales of merchandise and services, which is a drop of 21% year-on-year, with the main reason being the national motorway company DARS switching to an electronic tolling system.

The group also sold 5.7 TWh of natural gas, 2.9 TWh of electricity and 83.7 thousand MWh of heating energy in the first quarter of the year. Investments at the group level amounted to EUR 8.2 million in the first three months of the year.

At the end of March, the group had 6,162 employees, 593 service stations and 323 electric vehicle charging stations, including 318 service stations in Slovenia, 202 in Croatia, 42 in Bosnia-Herzegovina, 16 in Serbia and 15 in Montenegro.

"The group has performed successfully in the challenging business situation caused by the energy crisis and the situation in Ukraine," the report says, adding that the management had properly responded to recent developments.

It notes that the group does not have subsidiaries or representation offices in Ukraine, Russia and Belarus, and that the share of revenue generated in these markets is negligible, as is the purchase of energy, except for natural gas.

Russia as a source of supply of diesel and extra light heating oil represented 7% of the purchase portfolio in this segment in 2021 and this year, while Petrol does not import petrol from Russia.

The main risk this year is the negative effects of the energy crisis on inflation and, consequently, on growth of the costs of living and management of operating costs.

Last year, Petrol generated EUR 4.96 billion in sales revenue and posted a net profit of EUR 124.5 million at the group level. It plans to generate EUR 5.9 billion in sales revenue and EUR 158.3 million in net profit this year.

STA, 10 May 2022 -  The government reintroduced price caps on motor fuels on Tuesday, setting the maximum retail prices at EUR 1.560 a litre for regular petrol and EUR 1.668 a litre for diesel. Wholesale prices are capped at EUR 1.540 for regular and EUR 1.648 for diesel. The caps will come into effect on Wednesday.

A release issued after the cabinet's correspondence session said the government reintroduced temporary administrative pricing for the two most popular fuels in view of the well-founded expectations of further disruptions in the market of oil products and significant price volatility in response to the planned EU embargo on Russian oil imports.

The Economy Ministry also said the measure was aimed at stabilising the market and prices for the benefit of businesses and consumers.

The regulation imposing the caps requires of companies to continue to sell their goods regardless of the cap on whole- and retail-sale prices. They will thus be eligible for compensation for the damage, to be set by the government once the measure expires.

The maximum retail price was set on the basis of the latest seven-day average representative price of petroleum products for Slovenia as reported to the European Commission in the Weekly Oil Bulletin. The maximum wholesale prices are by two cents per litre below the retail price caps, which the government finds makes it possible to sell petroleum products to small traders.

The regulation on the price caps was published in the Official Gazette today and will come into effect tomorrow. It will be in force for three months, that is by 10 August.

The Economy Ministry gave an assessment of the fiscal impact of re-regulation of prices in the documents released by the government.

Three leading fuel retailers (Petrol operates 318 service stations, OMV 120 and MOL Slovenija 53 stations) estimate the financial damage to their business as a result of the cap on retail prices at about EUR 30 million a month, which does not include the damage in case of a cap on wholesale prices.

In case of price controls and retailer obligation to sell at regulated prices at the cost of substantial damage to business, the price control act provides for compensation. It could cost the state at least EUR 30 million a month, and prices had already been capped much lower from mid-March to the end of April.

The reintroduction of price caps had been hinted at by PM Janez Janša on Twitter earlier today after Robert Golob, the most plausible candidate for the new prime minister, announced yesterday his centre-left government would impose energy price regulation, targetting not just fuel but other energy sources as well.

The outgoing government imposed temporary caps on fuel prices on 14 March, capping the price of regular at the pump at EUR 1.503 and diesel at EUR 1.541 a litre. The measure expired at the end of April, and the government's decision not to extend it sent fuel prices soaring.

Regular sold at filling stations operated by Petrol and MOL Slovenija outside motorways today cost EUR 1.717 a litre, and diesel EUR 1.862 a litre. OMV Slovenija sells fuel at EUR 1.714 and diesel at EUR 1.856. Prices at service stations on motorways are even higher