Minister hopes energy vouchers won’t be needed

Ljubljana – Economy Minister Zdravko Počivalšek has confirmed the government is considering introducing energy vouchers to help the most vulnerable groups of population cope with rising prices, but also said on Thursday they hoped such measures would not be necessary.

The minister commented on potential measures during a visit to steel company SIJ Metal Ravne on Thursday after the government imposed a temporary cap on margins on heating oil yesterday.

The minister noted that the issue of rising energy prices is a complex one and thus not easy to tackle.

“We cannot affect gas prices because we rely fully on imports. We have electricity, at least 85% of which we produce in Slovenia but we export half of it and import the other half back. Likewise, prices of oil derivates depend on price trends in global markets.”

Global oil prices represent only 40% of the price at the pump with the rest made up of excise duties, contributions and the margin. The latter represents 7-8% of the sale price.

Slovenia first liberalised margins on heating oil and premium petrol in 2016, before margins on fuels sold along motorways were deregulated later that year and finally prices of fuels sold elsewhere were liberalised a year ago.

Analysing prices since the first liberalisation, the ministry has found the margins on premium and diesel have increased by only about 2%, while heating oil prices have risen by about 69% of which 64% due to global price hikes, while the margin has increased from six to 15 cents per litre, the minister said.

This is why the government temporarily capped distributors’ margin at six cents per litre. “Since we’re entering the heating season and the price growth has been dangerously high, we decided to temporarily freeze price margins per litre at the 2016 level.”

The minister added that further measures would depend on price trends.

The government has also discussed how to cope with the issue of energy poverty, Počivalšek said, adding that measures were in the pipeline to help the most vulnerable consumers if necessary.

“The Labour Ministry will draw up a proposal for energy vouchers, which […] we’ll react with in case the situation in energy prices changes in practice. Currently, it’s largely speculation and early changes,” said Počivalšek.

He said most of businesses had pre purchased energy supplies, with those who do not have long-term contracts to be hit first by prices hikes.

“The government will monitor developments in the energy sector and react if necessary on behalf of consumers and economy. Energy vouchers are one of the options to address the problem but I’d like none of those would be necessary.”

The minister also noted two options the government could apply with respect to electricity. “One option is to ban exports, should that be necessary, and the other to regulate the end price because all the production is state-owned.”

However, the minister made a point of saying that he was not saying any of the measures would be applied as he hoped “the situation in the energy products will stabilise”.

But he said the state would help “those who are prepared to take on the challenges of the future”. He noted that EUR 1.8 billion in grants is available in the recovery and resilience fund, of which EUR 427 million for businesses.

Meanwhile, the Environment Ministry said it would make EUR 266,000 available to reduce energy poverty until 2023; EUR 90,000 is available from the climate change fund this year and EUR 88,000 in each of the next two years.

The funds will be available to people who are eligible for regular or extraordinary social aid or security allowance. They will be able to apply for a visit by an energy advisor and a free package of devices and materials that save energy and water use.

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