Petrol: In Croatia, we still do not cover costs, and state revenue is not decreasing

Excise duties on petroleum products in Croatia can still be reduced, Petrol still does not cover costs, and the state is not at a loss, but budget revenues are at the same level as before, stated Nada Drobne Popović, CEO of the Petrol Group, at a press briefing.

According to her, the Petrol Group did not achieve its set goals in the first nine months of this year due to price regulations for petroleum products in both Slovenia and Croatia. However, since June, Petrol in Slovenia has been under a margin regulation regime that allows it to cover costs, but Drobne Popović emphasizes that their challenge is Croatia.

– Our challenge is much greater in Croatia than in Slovenia. In Croatia, we have more than 12 months of different regulatory periods. Although margin regulation has been reinstated, that margin is not sufficient to cover all costs – she said.

On the other hand, she said, excise duties and levies in Croatia remain such that the state is not at a loss. In Croatia, she stated, there is a possibility that these excise duties can still be reduced as they are not at the lowest European level. She emphasized that this needs to be done because the pressure on citizens due to high fuel prices is significant.

– Everything needs to be done to reduce the pressure on the final price – she emphasized.

Petrol expects that a model will be found in Croatia that will successfully reduce part of the excise duty, so that margins can be raised to a level where costs can be covered.

Decline in profits due to government measures in Slovenia and Croatia

As reported, the adjusted gross profit of the Petrol Group in the first nine months of this year fell in both Slovenia and Croatia, and Petrol states that the reason for this is government measures in the motor fuel market in both countries.

During this period, the Petrol Group achieved an EBITDA of 98.3 million euros (44 percent less than last year) and a net profit of 24 million euros. As a result of government measures in the fuel market, the adjusted gross profit decreased by 108.9 million euros in Slovenia and by 34.6 million euros in Croatia, according to Petrol.

Furthermore, the Petrol Group achieved sales revenues of seven billion euros in the first nine months of 2022, which is 128 percent more than in the same period of 2021.

The increase in revenue compared to the same period last year was influenced not only by the increase in procurement and sales prices of fuels and energy but also by increased quantitative sales of fuels and derivatives, the merger of Crodux derivatives two with the Petrol Group, and fuel price regulation.

The corrected gross profit in nine months amounted to 405.3 million euros, which is one percent less than in the first nine months of 2021.

Petrol emphasizes that the positive contribution of the merger of Crodux derivatives two to the growth of adjusted gross profit was completely offset by the effect of fuel price regulation in Croatia, as regulated prices did not allow for the coverage of operating costs.

According to company data, Petrol holds a market share of 25 to 45 percent in the Croatian petroleum derivatives market, depending on the type of derivative.

Petrol reminds that it is significantly investing in solar power plants in Croatia and manages the Glunča and Ljubač wind farms, and the construction of three solar power plants – Suknovci, Pliskovo, and Vrbnik – is underway.

In the last five years, Drobne Popović stated, Petrol has invested 250 million euros in Croatia, and more projects are planned.