Slovakia will cap retail margins on petrol and diesel at 10 cents per litre from October 1, the government decided on September 23, a day after Prime Minister Robert Fico demanded an EU emergency summit on fuel prices.
“A margin limit does not mean that price growth will stop if the price of the commodity goes up,” Fico told reporters after the cabinet session, according to the TASR news agency.
Bratislava is the latest government in the region to intervene as the oil crisis pushes pump prices higher. The Czech cabinet reinstated its cap on fuel prices from October 1, while Hungary opted for targeted compensation for diesel drivers. Slovak diesel averaged €1.924 per litre and petrol €1.808 on September 22, the highest in more than four years, The Slovak Spectator reported.
Fico said on September 22 that the EU was leaving member states “at the mercy of the horrible impacts of the oil crisis” and should convene an emergency summit, Reuters reported.
“The fact that we as member states are expected to compensate astronomical prices of fuels at the expense of pensions or healthcare is a display not just of the EU’s incompetence, but above all the EU’s cynicism,” he said in a statement.
Fico argued that the EU had shown it could quickly convene emergency summits and commit hundreds of billions of euros to Ukraine, and should show the same urgency on its own citizens’ cost of living.
Alongside the margin cap, the cabinet halved second-class rail fares for 30 days from October 1, covering single tickets and weekly and monthly passes but not international fares or reservations, Kanal1 reported. The discount will cost €5.3mn, including €4.3mn in lost revenue. Transport Minister Jozef Raz must propose by September 30 a scheme under which the state would cover a third of suburban bus costs for regions that cut fares by 30%.
The government ruled out cutting excise duty or VAT on fuel, citing a lack of room in the budget, and does not plan an extra levy on Slovnaft, the country’s only refinery, owned by Hungary’s MOL (BUD: MOL), TECHBYTE reported. Slovnaft chief Gabriel Szabo warned ahead of a September 16 cabinet session that any state intervention in pricing could disrupt imports or trigger fuel tourism.
Fico, a populist who has kept warm ties with Moscow, has stepped up attacks on the EU and Nato, and last week clashed with Czech President Petr Pavel after saying he did not want Slovakia drawn into a conflict despite its obligations under Nato’s Article 5. Slovakia declared an oil emergency earlier this year and restricted fuel exports after disruption to Russian crude supplies via the Druzhba pipeline.