Petitions for the review of the constitutionality and legality and for a temporary suspension of the implementation of the new amendment to the Decree on Setting Prices for Certain Petroleum Products
Ljubljana, 4 December 2023 – Today, Petrol d.d., Ljubljana submitted a “PETITION FOR THE REVIEW OF THE CONSTITUTIONALITY AND LEGALITY of Decree on Setting Prices for Certain Petroleum Products (Official Journal of the RS, No. 66/2023), Decree on Setting Prices for Certain Petroleum Products (Official Journal of the RS, No. 66/2023, 120/2023) and Decree amending Decree on Setting Prices for Certain Petroleum Products (Official Journal of the RS, No. 120/2023)" and a "PETITION FOR A TEMPORARY SUSPENSION OF IMPLEMENTATION (with a petition for an absolute-priority procedure)".
Petrol d.d., Ljubljana has prepared the petition in the light of the recent decisions made by the Government of the Republic of Slovenia to decrease the limited petroleum product margins, effective from 5 December 2023, such as determined in Decree amending Decree on Setting Prices for Certain Petroleum Products (Official Journal of the RS, No. 120/2023). We believe that the adopted measures are disproportionate and in contradiction with Articles 3 and 8 of the Price Control Act.
At its correspondence meeting held on Thursday, 30 November 2023, the Government of the Republic of Slovenia adopted an amendment to Decree on Setting Prices for Certain Petroleum Products. The amendment implies setting a new, lower maximum permitted margin on certain petroleum products, which has a direct negative impact on the operations of Petrol d.d., Ljubljana and the Petrol Group. According to the new Decree, the maximum permitted margin on unleaded petrol is set at EUR 0.0694 per litre, which is EUR 0.03 per litre or 30% less than before the amendment of Decree when it stood at EUR 0.0994 per litre. The margin on diesel is set at EUR 0.0683 per litre, down by EUR 0.03 per litre or 31% compared to before the amendment of Decree when it was EUR 0.0983 per litre.
We stress that such margin neither reflects the real market conditions nor allows for business viability, especially in less densely populated areas. As recognised by the Constitutional Court practice, profitability is the foundation of the economic activity. The regulated margin has been unchanged since 17 August 2022 and the substantially increased operating costs in 2023 make the oil sellers’ operating conditions more difficult. Oil sellers’ margin also accounts for a small share in the final retail price structure. Moreover, according to the European Commission, the margins currently in place on 95-octane petrol and diesel fuel in the Republic of Slovenia amount to merely 45.1% and 39.5% of the EU average, respectively.
With Decree amending Decree Determining the Amount of Excise Duty on Energy Products and Electricity (Official Journal of the RS, No. 120/2023), the Government of the Republic of Slovenia decreased the excise duty by EUR 0.03 per litre, from EUR 0.49051 per litre to EUR 0.46051 per litre for petrol (-6%), and the same for diesel, by EUR 0.03 per litre, from EUR 0.42267 per litre to EUR 0.39267 per litre (-7%).
These changes lead to a disproportionate pressure on our operations because petroleum product sellers use the margins to cover the increased operating costs, including transport costs, costs of service station operation, labour costs, costs of support services, marketing and amortisation and depreciation. As a result, such regulation forces us to reduce the funds available for investments in the green transition, that is, the transition from fossil fuel technologies to low-carbon fuels and energy commodities, which is one of the fundamental goals of the entire energy sector.
We have also brought these arguments before the Constitutional Court of the Republic of Slovenia because we want to ensure that we stay competitive and continue to operate efficiently, in accordance with the constitutional and legislative norms.
The petition for the review of the constitutionality and legality has been submitted with the purpose to protect the interests of all company stakeholders and to ensure that Petrol d.d., Ljubljana continues to operate efficiently and stay competitive on the market.