Due to energy price regulation, Petrol is seeking 56 million euros from Croatia

Petrol has taken measures for compensation due to regulated energy prices last year in Slovenia and Croatia, seeking compensation from Croatia in the amount of 56 million euros, Petrol reported on Tuesday.

– Some concrete measures have already been taken to compensate for the damage caused by regulated energy prices in 2022 for Slovenia and Croatia. The damage had a strong negative impact on the business results of the Petrol group shown in the preliminary unaudited assessment for the business of the Petrol group for 2022. Proposals for an amicable resolution of the dispute have been submitted to the state attorney’s office in both Slovenia and Croatia, amounting to 106 million euros in Slovenia and 56 million euros in Croatia – Petrol stated in a press release regarding the shareholders’ meeting held yesterday.

The company also reported that it has already sent a notice to the European Commission regarding the impact of price regulation on business and market competitiveness in Croatia. They have also initiated a request to the governments of both countries for the abolition of price regulation on oil products.

In addition to measures for compensation due to regulated energy prices, Petrol’s shareholders were informed at the meeting about the company’s performance assessment for this and last year.

– Based on the current situation, an assessment of the impact of price regulation in Slovenia and Croatia on the EBITDA of the Petrol group has been made. Considering the applicable regulations, the negative impact of the regulations on the EBITDA of the group would be 82.4 million euros, of which the largest share, 62.5 million euros, relates to the regulation of motor fuels in Croatia – they calculated at Petrol.

They also state that a comparison of average fuel price margins in Slovenia with other EU countries for the period from 2020 to 2022 shows that Slovenia is at the bottom of the list of European countries and lags far behind the EU average in terms of diesel fuel margins, as well as gasoline.

– The key challenge of such low margins is that they do not allow for investment in green transformation – they say in the Slovenian company, adding that in 2022, initially planned investments of 100 million euros were reduced to the bare minimum or 60 million euros, of which only 24.4 million euros were intended for energy transition. For 2023, initially planned investments of 135 million euros have been reduced to 70 million euros, of which only 30 percent will be allocated for energy transition.

The management also presented the structure of retail prices of regulated fuels in Slovenia and Croatia at the meeting. The margin per liter of gasoline or diesel represents much less than one-tenth of the price in both markets and cannot cover increased labor costs, procurement prices of energy, transportation and storage costs, and financial procurement costs, Petrol states.

– Given the role of the Petrol group in the Slovenian and Croatian economic and social environment, an inadequate regulatory framework, if it remains in force for a longer time, can have broader economic and social consequences – warn the Slovenian company.

They also provide data that in 2022, Petrol contributed 1.102 billion euros in excise duties, taxes, and contributions to the Slovenian budget and 20.2 million euros in dividends. The Croatian company within the Petrol group contributed 533 million euros in excise duties, taxes, and contributions to the Croatian state budget last year, according to the statement.

They add that Petrol was the largest company in Slovenia by annual revenue in 2022, with 3,320 employees and a wide network of over 3,700 suppliers. In Croatia, the company has 2,211 employees and collaborates with over 1,500 Croatian suppliers.

Petrol also cites paid dividends as one of the important contributions of the company – in 2021, 61.7 million euros in dividends were paid, of which 20.2 million euros went to state entities, and a total of 3.4 million euros in income tax was withheld from domestic individuals.

– The consequences of too low margins will thus affect all stakeholders of the Petrol group – they believe in the Slovenian company.