Yesterday, the Slovenian Government published a draft of regulation on petroleum product prices, which keeps the same margin and calculation of prices of petrol for retailers. In this brief overview, we highlight the current situation and the main changes, as well as its effect on Petrol Group.

Yesterday, the Slovenian Government published a draft of the regulation of petroleum product prices, where it keeps the same margin and calculation of petrol prices for retailers. This regulation comes into force on 21 June 2023 and it would be valid for one year. The method for fuel calculation pricing stays the same and the margin for motor fuel is the same as before and it amounts to 0,0994 EUR/l (NMB-95).

The prolongation comes at a time when prices of Brent oil are down 32% YoY and they are more than 40% lower than their peak in March last year. Retailers like Petrol supply themselves with derivatives on the Mediterranean stock exchange. The prices of derivatives follow this trend of price decrease.

According to its business plan announced in January 2023, Petrol said that it expects petroleum product price regulation and the conditions in energy markets to continue in 2023. They also expected the growth to slow down and inflationary pressures to continue. Overall, the Group expects to generate sales revenue of EUR 10.2bn in 2023. Petrol plans to achieve mentioned sales revenue by selling 4.0m tons of fuels and petroleum products, 11.6 TWh of natural gas, 12.9m TWh of electricity (both trading and sales to end customers), 154.6 thousand MWh of heat, and by producing 188.4 thousand MWh of electricity. Consequently, Petrol plans its EBITDA to amount to EUR 250.4m and its net profit of EUR 117.1m in 2023.

On the other hand, the Croatian government has already increased fuel distribution margins on the 5th of June 2023, by increasing the maximum margin for motor fuel from 0,0995 EUR/l to 0,1245 EUR/l. In the formula determined by the Slovenian regulation, the partial cost of mixing the biocomponent is also included. In Croatia, this cost is not included and is covered directly from the margin so now this increase in margin should cover the cost of biocomponent and still top the Slovenian margin.

Brent oil fuel prices (2020 – 2023 YTD, USD/bbl)

Source: Bloomberg, InterCapital Research