Slovenia, Fuel price caps incurred over 100 million euros in losses for fuel retailers

, SEE Energy News

Slovenian fuel retailers, led by Petrol, are trying to revoke the Government’s fuel price regulation system, which, according to their calculations, already caused them more than 100 million euros in damages in the two and a half months in force.

The current price cap is valid until 10 August and fuel retailers believe that it should be changed. They claim that the previous Government, led by PM Jansa, did not want to talk with them, adding that the new Government, led by PM Golob, said that it will negotiate with retailers over mitigating the burden of price caps.

Already in mid-March, at the beginning of the regulation, it was clear that Slovenian fuel retailers are not satisfied with the move made by Jansa Government, which shifted the cost of capping the price of fuel to them. Namely, the Government limited the prices by a decree, but did not determine the source from which to cover the deficit (e.g. reduction of VAT, excise duties or any other component of the retail price of fuel). The Government most likely did this because a reduction in taxes would simply cause an excessive budget deficit. Thus, fuel retailers were forced to operate at a loss. In the first round of regulation alone, which lasted a month and a half, Petrol calculated 51 million euros in compensation (including lost profits).

Slovenian Government introduced fuel price caps on 15 March, which lasted until the end of April, after which prices were capped again on 11 May. The current measure is valid for three months, namely until 10 August.