Fuel prices in Slovenia - Exorbitant prices, but not to please retailers.
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Fuel prices in Slovenia - Exorbitant prices, but not to please retailers.

Last September, Slovenia became the next in a number of European countries to leave the regulation of oil prices to the discretion of the market leadership. This is a more than four-year process in which the government lifted the price regulation for ultralight heating oil, RON 2016 and RON for the first time in 98. This was followed by the removal of price regulation for all fuels at gas stations near motorways and expressways, and then on 100 September canceled at all other filling stations.

Price deregulation has occurred respecially at a time when we in Slovenia – as well as around the world – have seen crude oil prices decline for several months.and retail fuel prices were fixed at € 95 for RON XNUMX gasoline or diesel after exactly several months of sharp drops. The decline in prices, of course, can be explained by the global situation, which led to a significant decrease in global demand for petroleum products. Thus, the oil companies had an excessive amount of fuel that they had nowhere to store. Although it sounds absurd, the cost of crude oil in the world markets has reached negative values!

Fuel prices in Slovenia - Exorbitant prices, but not to please retailers.

At the end of September, the government, as already mentioned, left control over the prices of petroleum products entirely to the control of the market, but ensured the restoration of control over the movement of prices in the market in the event of an increase in prices in the market. rise in prices. Then the idea of ​​the government, at first glance, was somewhat unexpectedly supported by the Transport Section of the Chamber of Commerce and Industry of Slovenia, saying that they expect a fall in prices for oil products. On the other hand, the Slovenian Consumer Association (ZPS) was much more skeptical about the government's decision., since they, unlike the Chamber of Commerce and Industry, expressed fears of rising prices - at first this turned out to be unjustified. But things soon began to take a slightly different turn, and in line with ZPS's fears.

When we compare prices for petroleum products in Slovenia today, we find that that their price has risen by about 20 cents in the last six months (a little less for the 95th gasoline, a little more for a diesel), so many have already begun to look for the culprits. Last but not least, a quick look at the fuel prices of the three largest Slovenian oil traders – Petrol, OMV and MOL – reveals significant price harmonization throughout the country (outside of motorways), with differences that are negligible, or at least much smaller. than those quoted by discount retailers at their service stations.

This quickly creates the impression that only traders are responsible for the situation. But a closer look at the numbers shows that the rise in prices was not an oil trader's drive to increase profits. Soon after the abolition of state regulation of prices, a period of economic awakening began both within the country and abroad, which led to an increase in the demand for petroleum products not only within the country, but also on world markets.

Looking at the dynamics of oil prices last year, we can see that the price of crude oil reached a low and negative value on April 20 last year, and then, thanks to a significant reduction in pumping, relatively quickly re-negotiated by the OPEC countries and Russia. Thus, by the beginning of July, it again reached the value of $ 40 per barrel of oil (159 liters)..

By November 34, the oil price, taking into account periodic falls, including the beginning of the second wave of the epidemic, when the price fell to $ 30 per barrel, fluctuated in the range from $ 40 to $ XNUMX per barrel, after which it was followed only by very rapid price increases. In early March, it had already reached $68 per barrel, and at the end of the month it was about $60 (this is the same as, say, in the mid-20s, adjusted for inflation).when the US was hit by the first oil crisis).

Thus, the data shows that the current price of crude oil is comparable to the price in the new year 2019/2020, when it was already clear that the danger in the form of a new virus was approaching us from China, and this has not happened yet. it is known to what extent the epidemic will affect the world. At the same time, of course, it makes sense to compare the prices of oil products in Slovenia then and today.

Gasoline, OMV and others have basically a clear conscience ...

From the table of the dynamics of prices for petroleum products in the period from 2007 to 2020, it can be seen that the retail price of gasoline with an octane rating of 95 in the transition period from 2019 to 2020 was 1,298 euros.... The price of diesel fuel was 1,2 cents lower, but the prices were the same as for classic filling stations, and not for automatic ones operating in retail chains.. We are talking, of course, about prices at gas stations outside of motorway stops. At the end of March of this year, more precisely on Sunday, March 28, the price of petrol with an octane rating of 95 ranged from 1,159 to 1,189 euros, while the price of diesel fuel ranged from 1,149 to 1.219 euros.

Fuel prices in Slovenia - Exorbitant prices, but not to please retailers.

At the same time, it is clear that both the cheapest and the most expensive fuel could be obtained at automatic (self-service) gas stations of retail chains - in the first case it was Hofer, and in the second Mercator with its MaxEn services. . Otherwise, different suppliers at their gas stations throughout the country usually offer fuel at the same prices. while on that day Petrol asked for the least money for a liter of 95 octane gasoline, namely € 1,177. (OMV and Mol 1,179), and for a liter of diesel OMV, namely 1,199 euros (gasoline and mol 1,2 euros).

Thus, a comparison of fuel prices shows that fuel prices today for the same crude oil price on world markets are on average about 10 cents lower than in a good year and quarter ago; The difference is slightly larger for RON 95 gasoline and slightly less for diesel, which has been slightly faster in price lately.

It quickly becomes clear from the above data that oil traders in Slovenia are not an appropriate target for criticism due to higher prices, however we asked all three largest oil traders in Slovenia to comment on the current situation; only Petrol and OMV answered our questions, and Mol refused to cooperate.

On behalf of Petrol and OMV, both companies have developed a methodology for setting prices for petroleum products, which, however, cannot be disclosed due to competition protection rules. Both companies are also reluctant to comment on energy prices, as the price of crude oil is already influenced by various factors (mainly the dollar exchange rate), and the retail price of petroleum products in Slovenia consists of various duties and excise taxes, which may change.

At the same time, OMV explains the aforementioned statement that crude oil prices have reached their highest level since the outbreak began in early March, agreeing with the view of the Organization of the Petroleum Exporting Countries (OPEC), which predicts an increase in demand for crude oil in world markets. but this is not enough to make up for the deficit last year. OMV does not disclose the amount Petrol announced that it sold about three million tonnes of petroleum products in 2020, down 19 percent from 2019 and 13 percent less than planned.

Fuel prices in Slovenia - Exorbitant prices, but not to please retailers.

Full liberalization of prices for petroleum products is positively assessed by both companies, as it follows trends in neighboring countries, where this practice has been known for a long time. Petrol adds that they were well prepared for this transition as they have been present in markets where this practice has already been implemented for some time (not least for OMV), and adds that such a solution means that it also benefits customers. making it even easier for them to decide where to pump fuel.

OMV, on the other hand, adds that Slovenia is a transit country, which means that it can oil traders are now adapting faster to prices for oil products in other countries and, therefore, (p) also remain interesting for drivers or vehicles who simply cross our country and may stop before entering or leaving the country.

Further growth is more or less excluded

Boštyan Okorn, head of the testing department of goods and services of the Consumer Association of Slovenia, also argues that the rise in retail fuel prices is the culprit behind the rise in prices on world markets. According to Okorn, the price of crude oil has risen by as much as 2020 percent from November 2021 to the end of March 70, despite a slight drop in recent days, which makes it understandable for a noticeable rise in retail prices during this period. However, he adds that the liberalization of the petroleum product market has made price changes somewhat more pronounced.

At a time when fuel prices were set by the state, we only received changes every 14 days, so consumers did not experience any intermediate changes in retail fuel prices. At the same time, by adjusting the level of excises, the government had a mechanism to mitigate large changes in fuel prices - both in the case of lower and higher prices. Tif, for example, until the end of 2014, when the price of 95 octane gasoline was approaching 1,5 euros per liter of fuel, the state took as much as 0,56 euros.; In May last year, this amount was 0,51 euros, and in September, before liberalization, it was only 0,37 euros. At the same time, Okorn adds that the ratio of prices for petroleum products between domestic suppliers and suppliers in neighboring countries has always remained more or less unchanged.

Okorn also touched on what can be expected in the future in the area of ​​oil prices. Although he agrees with the opinion of the two largest state oil traders about the ingratitude of forecasts for the dynamics of fuel prices, he believes that a sharp rise in prices for oil products is no longer expected in the future. In the short term, this will be facilitated by the end of winter (which means a decrease in the need for oil products for heating) and a small economic crisis, which, in his opinion, will soon follow.

So this year, a price increase of more than 10 or even 15 cents will be a big surprise.... At the same time, prices for petroleum products are expected to remain below 1,5 euros per liter of fuel in the future, which will be facilitated by the electrification of new cars (and, as a result, a decrease in the demand for petroleum products). However, it is true that at the EU level a so-called European Green Agreement is being prepared, which mentions possible additional taxes on motor fuels to accelerate the transition to electrified vehicles.

Fuel prices in Slovenia - Exorbitant prices, but not to please retailers.

While Okorn does not point to oil traders due to the recent price hikes, he warns that, like overseas, signs should be posted next to highways, on which motor fuel prices will be written on following several gas stations, and at the same time, place totems in stations that would show drivers the prices of transmissions before they lift the handle of a crane at a gas station. Last but not least, it will also lead to unification of prices at service stations of different providers.

The amount of oil pumped is also critical.

Of course, the price of crude oil is also heavily influenced by the amount of crude oil that oil companies pump around the world. Last but not least, this is one of the reasons for the rapid fall in prices last spring and the rapid growth at the end of the year. Although the epidemic swept the world in early spring and was accompanied by a global drop in demand for petroleum products, it was only in May, when the price of oil reached zero, that the oil giants decided to sharply reduce the volume of oil produced.

If on April 30 the daily oil production in the world was 82,83 million barrels, then for the month it was only 71,45 million barrels. (one million less per month). By the end of the year, volume then increased slightly again, but “only” to 75,94 million barrels, much less than ever before in the past five years, when volume has hovered almost without exception above 80 million barrels per day.

Several factors affect the price.

The retail price of fuel (in addition to the purchase price of fuel) is made up of several factors, the number (or share) of which is determined by law. These:

  • CO2 tax: a tax on air pollution by carbon dioxide emissions.
  • EAEU Contribution: Contribution to Energy Efficiency (since 2010).
  • RES and CHP contribution; Contribution to support electricity generation from highly efficient cogeneration and from renewable energy sources (since June 2014).
  • Excise tax: for energy.
  • VAT: value added tax.
  • Final price: retail price.

Thus, in practice, a liter of RON 95 fuel is taxed according to the following formula:

The price of petroleum products in Slovenia
 2020
No obligationCO2 emissions taxEAEU contributionRES and CHP contributionExcise dutyVATFinal price
95 euros (euro / liter)0,3910,0400,0070,0080,4280,1931,069

Slovenia among the cheapest

After a sharp drop in prices less than a year ago, this Slovenia became one of the European countries with the lowest fuel prices and maintains this status to this day. With an average price of just under € 1,16 per liter of RON 95 gasoline (valid as of mid-March), it ranks 15th out of 45 European countries and is also the cheapest in the region. At a price of € 1,18, Hungary is the closest among the neighboring countries, followed by Austria (€ 1,18 per liter), Austria (€ 1,22), Croatia (€ 1,35) and Italy at € 1,62 per liter. liter of 95th gasoline takes 43rd place. Thus, this type of gasoline is more expensive only in Portugal and the Netherlands, where a liter of 95 octane gasoline costs 1,65 and 1,85 euros, respectively.

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