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Croatia passes new energy price cap as Petrol plans to protest

Earlier last week, the Croatian government adopted a new regulation on determining the highest retail prices of oil derivatives and a regulation on amending the Regulation on the amount of excise duty on energy products and electricity.

As a result, the highest retail prices of petrol are now calculated using a formula of the basic price of fossil fuel in the previous 14-day period, with a limited margin of 0.0995 euros/litre for diesel and gasoline fuel and 0.0531 euros/l for blue diesel and in the amount of 0.8229 euros/kg for the propane-butane mixture in bottles or 0.03716 euros/kilogram for large containers. Compared to the previous pricing system, the margin on diesel and gasoline fuel and energy entities have returned to the cap from June 2022. The current regime will be valid for the next 14-day period.

As stated in a press release by the Croatian Ministry of Economy and Sustainable Development, the new prices will be 1.33 euros/l for gasoline fuel, 1.47 euros/l for diesel fuel, 0.97 euros/l for blue diesel, 1.22 euros/kg for LPG in tanks and 1.78 euros/kg for LPG in bottles.

Whilst the new Regulation on amending the Regulation on the amount of excise duty on energy products and electricity will reduce the amount of excise duty, which the Croatian government lowered on nine occasions during 2022, through amendments to this regulation.

In February, following Russia’s invasion of Ukraine, the Croatian government capped fuel prices to help ease a sharp rise in the cost of living and kept the cap throughout 2022 as inflation peaked. It was further lowered in December, despite a fall in global oil prices.

According to the Ministry’s press release, “given that there are still circumstances that affect the increase in the prices of energy products and the continuing reduction of the excise duty during 2022”, the amendment to the Regulation on the amount of excise duty on energy products and electricity sets out a reduction of the excise duty for the most sold energy products (unleaded motor gasoline and diesel fuel and for fuel oil) for the period until 31 January, 2023.

Croatia’s second-largest fuel retailer protests the latest measures

Before the adoption of the latest price cap, Croatia’s second-largest fuel retailer Petrol said it would close its stations in the country for one hour to protest over the government’s fuel price cap, which it said was causing it great damage.

“We apologise to our loyal buyers because we shall say No to interventionist measures for fuel prices,” Petrol said on its website. “They endanger reliable and stable supplies of fuel.”

Petrol operates about 200 gas stations in Croatia, accounting for 23 per cent of the market.

Slovenia, where Petrol is the largest fuel retailer, has also capped fuel prices. The company said on Tuesday that it suffered a loss of 108.9 million euros from January – September in Slovenia while the loss in Croatia stood at 34.6 million euros in the same period. The company added that the Slovenian government failed to refund it for the price cap as promised, and warned that in January it would ask for a settlement, and if that failed it would file a lawsuit against authorities.

Petrol said that it would take the same action in Croatia unless the government stops intervening in the price.

The Economy Minister, Davor Filipovic, said that he was “unpleasantly surprised” by Petrol’s closure of the gas stations but the government would work to ease disruption. “In this crisis, everybody needs to carry their part of the burden,” Mr Filipovic told reporters following a meeting with Petrol officials two weeks ago.

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