Slovenia, Petrol to lose 248 million euros in 2023 due to fuel price caps, SEE Energy News
Slovenian energy group Petrol said that it has started reviewing the constitutionality of the regulation of fuel prices in Slovenia and Croatia, estimating that it will take a hit of some 248 million euro from the measure in 2023.
Petrol said that the measure will affect the investment capacity and dynamics of the green transition of the company. In accordance with the available funds, Petrol is reducing investments by 100 million euros in 2022 and 2023, also cutting the share of investments intended for energy transition.
In 2022, the regulation of fuel prices on all markets had a negative impact on the Petrol Group’s earnings before interest, taxes, depreciation and amortization (EBITDA) in the total amount of 194.1 million euros. The regulation of prices of other energy products on the markets of Slovenia and Croatia had a negative impact of 16 million euros.
The company argues that current regulatory measures in the field of fuel sales are disproportionate, there are no longer any circumstances requiring regulation of the prices of oil derivatives, and oil prices are back to the same level as before the start of the war in Ukraine. Price regulation is inadequate because it destroys the market.
Petrol recorded a net profit in the amount of 24 million euros in the first nine months of 2022, which is 74 % lower compared to the same period last year. The drop in profit is a result of the Government measures imposed on the fuel market, thus Petrol Group’s adjusted gross profit was lower by 108.9 million euro in Slovenia and 34.6 million euro in Croatia, with an additional drop in the adjusted gross profit in Slovenia from the electricity and natural gas price regulation. As a result of the these measures, Petrol was forced to sell motor fuels at prices below the cost for 90 % of the time between 15 March 2022 and 21 June 2022.
Sales revenues in the January-September 2022 period more than doubled to 7 billion euros from 3.1 billion euros in the same period in 2021, backed by the rising cost and selling prices of fuels and energy commodities, increased volumes of fuels and fuel products, the merger of Croatian Crodux Derivati Dva into Petrol Group and fuel price regulation. The company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) dropped by 44 % year-on-year to 98.3 million euros in the first nine months of 2022.