29 Jul 2022, 11:12 AM

STA, 28 July 2022 - The government decided to reduce value added tax (VAT) on energy products for all users at Thursday's session, Finance Minister Klemen Boštjančič told a press conference. The reduced tax rate of 9.5% will apply for the heating season, from 1 September to 31 May next year.

The government proposes to reduce VAT on supplies of electricity, natural gas, firewood and district heating. These are being proposed in a bill on emergency VAT measure to mitigate rising energy prices, which is being put forward to parliament to be passed in emergency procedure.

"By temporarily reducing the VAT rate from 22% to 9.5%, the government is addressing the impact of energy price increases during the peak energy consumption period, the heating season. The lower rate applies to all consumers of these energy products, both households and commercial," the Government Communication Office said in a press release.

The lower VAT on electricity and natural gas adds to the measures already taken to regulate the prices of these energy products, but when it comes to firewood and district heating, the reduced VAT rate is the first such measure the government is taking to mitigate price hikes, Boštjančič said.

VAT reductions cannot be applied to heating oil due to a European directive, and the government has limited options for wood biomass, where it cannot regulate prices. "We hope that the reduction in this area will not translate into higher margins of traders," he noted.

In the next steps, the government will also address the regulation of heating oil and district heating prices.

The lower VAT will result in a roughly EUR 130 million shortfall in the state budget, some EUR 40 million less this year and EUR 90 million less next year. The positive impact on households is expected to be between a few hundred euros and more than a thousand euros during the heating season, according to the minister.

He also announced that the government is "very likely" to prepare a supplementary budget for this year. "It is no secret that both the expenditure and revenue sides will be quite different from those in the adopted budget," he said.

Changes to the existing budget will be prepared while adopting the 2023 and 2024 budgets, and discussions on these will start after 20 August.

28 Jul 2022, 11:59 AM

STA, 28 July 2022 - The Solkan Hydropower Plant has been temporarily shut down due to extremely low flow of the Soča river caused by prolonged drought, its operator, Soške Elektrarne Nova Gorica, has announced. This is the first time the Solkan plant has been non-operational since 2003.

Currently, the average flow of the river in Solkan is so low that it does not allow for the turbines to operate safely, explained the hydropower company.

The ecologically acceptable flow is ensured by guiding the water over the gates of the dam and is equal to the natural inflow of the Soča river.

Up until Wednesday, a slightly higher-than-natural flow was ensured by emptying the reservoirs.

However, reservoir levels on the Soča have reached critical levels that no longer allow for them to be emptied, the company added.

Primorski Dnevnik meanwhile reported that Stefano Zannier, the agriculture minister of the bordering Friuli Venezia Giulia region in Italy had urged the Italian government to contact the Slovenian government to see whether it was possible to increase the river flow at the Solkan dam.

The newspaper of the Slovenian minority in Italy added that, according to the hydropower plant operator, this will most likely not be possible.

Right after the turbines at Solkan stopped, the water level of the Soča in Nova Gorica started dropping, most noticeably near Ločnik where larger amounts of water are redirected to the Fara channel.

As a result, fish have started gathering in large pools near Gorizia and Sant'Andrea in Italy, the minority newspaper reported.

The local land reclamation consortium also noted the diminished water flow on Wednesday, and acted accordingly, managing to prevent a massive fish die-off by reducing the flow to all irrigation canals and shutting down all irrigation devices.

The situation is also being closely monitored by the regional fisheries institute in Friuli Venezia Giulia. It has also ensured that fish from the driest parts of the Soča river were transferred to safety, Primorski Dnevnik noted.

The Slovenian newspaper Primorske Novice also reported that the flow on the part of the Soča waterbed between Savogna and Sagrado, south-west of Gorizia had completely stopped in what is an exceptionally rare occurrence.

The 5-kilometre strip now only has pools of waters where fish are seeking refuge, and a similar situation has developed at the confluence of the Soča and Vipava rivers, the newspaper notes.

The average flow of the Soča in the first half of the year was 39 cubic metres per second, half the usual.

The power utility Holding Slovenske Elektrarne (HSE) said that SENG had realised only 54% of the planned output for the first half of the year, and that the situation was similar when it comes to the power plants on the Drava and Sava rivers.

Compared to the five-year average, electricity production is down by 31% on the Drava, by 45% on the Soča, and by 39% on the lower section of the Sava.

HSE is well-equipped to deal with dry spells, the company told the STA, adding that the plan was to deal with energy shortages by acquiring electricity on foreign markets and restructuring production in their hydropower plants.

However, due to the instability of the energy market, the drought has had a negative impact on HSE's operations.

27 Jul 2022, 08:00 AM

STA, 26 July 2022 - The monitoring and comparison of retail prices of 15 basic foodstuffs at different retailers is expected to start in September, shows an open call for a price monitoring contractor. This is one of the government's measures to address the cost of living crisis that is aimed at preventing excessively steep price hikes.

The main objective of price monitoring is to provide consumers with information on the retail prices of comparable products between individual retailers and on the origin and quality of each product. This will make it easier for them to make choices in a time of price hikes, the Ministry of Agriculture, Forestry and Food said in the open call documents.

The contractor is expected to set up a dedicated website to publish the current prices of this basic foodstuffs basket every fortnight over a seven-month period, from 1 September 2022 to 31 March 2023.

Three times during this period, the prices in Austria, Italy and Croatia will also be monitored.

The basket will include wheat white flour type 500, white bread and a certain type of pasta (price per kg for each), beef steaks, pork steaks and chicken fillet (all unseasoned and packaged, with price per kg and per package), fresh whole milk with 3.5% milk fat (price per l), liquid yoghurt with 3.2% milk fat (price per kg), semi-hard and semi-fat cheese (price per kg and per packaging) and butter (price per kg and per 250 g), M-grade cage-free eggs (price per 10 pieces), class 1 apples of various varieties (price per kg), potatoes (price per kg), sunflower oil (price per l) and white sugar (price per kg).

The final list will be coordinated with the ministry and should be ready by 8 September.

The first price monitoring should be carried out no later than on 12 September, and the website should be launched on 15 September at the latest.

To mitigate the effects of price hikes the government said it would make public the past prices of a basic food basket as well, so the list is expected to include the prices from 1 April to see which retailers kept them low and which increased them. Making this public is intended to discourage them from increasing prices too sharply.

Prime Minister Robert Golob said in mid-June that retailers had widely varying prices and margins, so the government will establish a clear picture of where prices for a basic basket of products are low and where they are "clearly astronomical". They will not do negative publicity, but positive publicity for those who have the lowest prices and the lowest margins, he added.

27 Jul 2022, 07:49 AM

STA, 26 July 2022 - Infrastructure Minister Bojan Kumer said there would be no rationing in the supply of natural gas to households in Slovenia this winter, as he attended a meeting of EU ministers in charge of energy in Brussels on Tuesday that agreed on rationing in gas consumption.

Many things would have to go wrong for gas supply disruptions to occur, Kumer said, adding that "if the only thing that happens is Russia stopping the supply of gas, there would be no serious challenges for supply in Slovenia".

This is especially true if the regulation on the reduction of gas consumption by 15% by March 2023, which was agreed on today, achieved its purpose, the minister added.

According to him, EU member states have made a very clear commitment to do more on a voluntary basis and express solidarity. "This positive approach truly fills us all with optimism."

Kumer noted that for the natural gas supply in Slovenia to be disrupted, "a lot of things would have to go wrong", including supply interruptions, a really severe winter and disruptions in the supply from liquefied natural gas (LNG) terminals.

Slovenia is very well connected with its neighbouring countries and, due to its small size, has a very low gas consumption compared to Italy, Croatia and Austria.

"This means that at least this protected segment, which accounts for approximately 20% of the annual consumption, can be quickly covered and supplied with other systems," the minister added.

This means that, according to Kumer, there is no fear there will be rationing in the supply of natural gas to households in the coming winter. "Absolutely not."

The EU ministers today confirmed the proposed European Commission regulation that sets a target of voluntary cut in gas consumption from 1 August to 31 March 2023 by 15% compared to the average gas consumption between August and March in the last five years.

There is also the possibility of mandatory cuts, where several exceptions are envisaged, including for island and Baltic countries, as well as for countries that are heavily dependent on gas for electricity production.

Kumer said that, when it comes to exceptions, it is crucial for Slovenia that these do not result in Slovenia becoming less competitive in terms of reducing gas consumption.

Slovenia could exercise exceptions for the supply of protected categories, such as households, healthcare and social institutions, he said, noting that there was also the exception related to the use of gas for electricity production.

Substituting natural gas with other fuel in the production of electricity could be one in a combination of various measures with which Slovenia could reduce gas consumption by 15%, Kumer said, adding that businesses could substitute natural gas with LPG.

It is precisely industry and businesses that account for over 70% of total natural gas consumption in Slovenia, so the government will advocate for industry and businesses to organise themselves and limit consumption on a voluntary basis, the minister said.

In addition, the government has already adopted recommendations for the public sector to introduce less intensive cooling in the summer and less intensive heating in the winter.

As for possible mandatory measures, Kumer said responses on a voluntary basis should be seen first, which will also be a topic of discussion on Thursday of the crisis task force headed by the minister.

"If all these measures on a voluntary basis fail to work, tougher measures will probably have to be taken," he said, adding that this would be made possible by the emergency legislation that was being drafted.

At the meeting, the minister commended the solidarity expressed by Italy, with which Slovenia signed an agreement on solidarity measures to ensure the reliability of gas supply.

Slovenia is in talks for similar agreement with Croatia and Austria. Croatia's Davor Filipović told his Slovenian counterpart that internal procedures had been accelerated and that he saw no obstacles for the agreement to be signed by the autumn.

Full support for speeding up the procedures to sign a relevant agreement with Austria has also been expressed by Minister of Climate Action, Environment, Energy, Mobility, Innovation and Technology Leonore Gewessler, the minister said.

22 Jul 2022, 15:46 PM

STA, 22 July 2022 - Slovenia's largest banks, NLB and NKBM, have announced they will stop charging negative interest rates on large deposits on the accounts of individuals and legal entities starting from 1 August, after the ECB raised its key interest rates on Thursday. Smaller banks are taking similar measures as well.

"Following the decision by the Governing Council of the European Central Bank to raise key interest rates in the euro zone by 0.5 percentage points, NLB has taken a decision to stop charging compensation for high balances on accounts and in deposit transactions," the bank said on Friday.

A similar message came from NKBM. "From 1 August, the bank will abolish the deposit charge for customers who are natural and legal persons. This means that we will no longer charge the fee, regardless of their account credit," the bank said in a press release.

Negative rates on large deposits will also be discontinued from August by Sparkasse. The bank only imposed such charges on legal entities. The DBS bank will discontinue such charges on physical persons in August.

The banks SKB, Unicredit and Delavska Hranilnica had previously announced they would lift the charges as soon as the ECB decided to end negative interest rates.

22 Jul 2022, 11:24 AM

STA, 22 July 2022 - The country's sole nuclear power station NEK is operating at full power and in line with administrative restrictions despite the low water level of the Sava river and high air temperatures.

The cooling towers are operating at full capacity. The plant's efficiency is slightly lower, which is why good coordination of the water regime with the hydroelectric power plants on the lower Sava is important, NEK said.

The plant's output is 1.5% lower than normal these days, but NEK has been running continuously for 443 days since the last scheduled maintenance was completed in May last year, the power station told the STA.

NEK uses the water from the Sava for cooling or extraction of heat which cannot be used for electricity generation but is needed to cool the condenser. In this process, pumps push the water captured in the river through the condenser and return it to the Sava. The flow rate in the condenser is about 25 cubic metres per second.

As the resulting warming of the river water could affect the biological characteristics of the Sava, there are administrative restrictions as to how much the water temperature is allowed to rise and how much water can be used. The cooling towers are activated whenever environmental conditions require it.

In extremely adverse weather conditions, compliance with these restrictions requires a reduction in the power plant's output. However, in order to reduce the plant's dependence on the river, NEK's cooling tower system was modernised and expanded in 2008.

The cooling system of NEK's tertiary circuit was improved and four additional cooling cells built. Before this upgrade of the cooling tower system, NEK operated at reduced power for 93 days in 2003 due to environmental constraints related to the Sava river.

22 Jul 2022, 11:06 AM

STA, 21 July 2022 - The government decided on Thursday to cap as of 1 September gas prices for households, small companies and basic social service providers. Excise duty remains halved, while VAT will be reduced from 22% to 9.5%. The government also tasked the country's main gas supplier to draft an action plan for complete suspension of Russian gas in three years.

The prices of gas for households will be capped at EUR 0.07300 per kW7/h excluding VAT, while the cap for small commercial users and social services providers will be set at EUR 0.07900 per kW/h excluding VAT.

The cap will be in place for a year, Infrastructure Minister Bojan Kumer told the press after the government session.

He explained that basic social service providers include hospitals, student dorms, retirement homes and prisons, while the small commercial users are defined as companies whose annual consumption does not exceed 100,000 kW/h.

Per year, average households buying gas from cheap providers will save about 10% or EUR 90-130, while those buying from expensive providers will see their annual bill decrease between EUR 170-675 or by between 13% and 37%, Kumer said, adding that additional energy aid payments would also be introduced for the poor.

Average social services providers buying gas from cheap suppliers will reduce their annual bill by up to EUR 1,390 or 11%. Those buying from suppliers with moderate prices will save up to EUR 8,710 a year or 44%, while those buying from the most expensive suppliers will save up to EUR 13,590 a year or 55%.

Small businesses buying from cheap suppliers will save EUR 205-313 a year or 10%, while those buying from expensive suppliers will save EUR 350-1,420 or between 11% and 34%.

As was the case with electricity, the government decided to extend the 50% reduction of gas excise duty. Moreover, the VAT reduction from 22% to 9.5% will not apply only to gas but also to electricity, Kumer said.

He added that the changes would be codified in emergency legislation that is to be drafted during the summer. Prime Minister Robert Golob said yesterday that this legislation would be presented to political party leaders at the end of August.

Kumer also said today that measures for big businesses would be drafted in the second half of August or the first half of September. These measures will be even more targetted than the ones presented so far, he said, adding the measures would be very specific, written "almost for individual cases".

"We will continue adopting measures so that all needed mechanisms will be in place in September to allow households and companies to worry less during autumn and winter," said Kumer.

The minister also said the government had tasked Plinovodi, Slovenia's main gas supplier, to draft an action plan together with gas import companies and the Infrastructure Ministry for complete suspension of Russian gas in the next three years.

The move comes after European Commission President Ursula von der Leyen advised member state to reduce gas consumption by 15%.

The Energy Chamber commented on the Commission's appeal earlier today, saying the reduction was a responsibility of everybody. It also called for measures that would support a shift to greater dependence on electricity.

The chamber also said that a suspension of Russian gas supply would likely be harder for Slovenia than for countries of western Europe, with the business sector bearing the brunt of the burden. Last year, households used only 13% of imported gas, the chamber said.

20 Jul 2022, 11:41 AM

STA, 19 July 2022 - The family of Edvard Svetlik, former CEO of car parts maker Hidria, sold its 42% in H&R, the 89% owner of Hidria, to Spanish automotive supplier Gonvarri, H&R confirmed on Wednesday after the news was reported by the business newspaper Finance the day before. 

While the value of the transaction has not been disclosed, last year the business magazine Manager estimated the stake held by Edvard Svetlik and his spouse Ivica Svetlik in Hidria at EUR 33.6 million.

The deal is pending regulatory approval, after which Gonvarri Industries will become a strategic partner of H&R, the latter said in a press release, adding that both companies hope to address new challenges posed by the fast-growing automotive industry, especially the rise of electric vehicles.

The majority stake in H&R, some 52%, is held by a consortium of managers consisting of Iztok Seljak, Dušan Lapajne, the Rejc family and entrepreneur Alex Luckmann.

The new partnership is aimed at becoming a leading supplier of electric and hybrid automotive components, specifically stators and rotors, the global market of which was last year valued at EUR 5 billion.

After the deal is fully approved, expectedly by the end of the year, Gonvarri representatives will also become part of Hidria's management board.

Gonvarri is one of the market leaders in steel and aluminium processing. The company is present in 26 countries in Europe, North and South America, and Asia, employing more than 6,000 people. In 2021, the company recorded revenues of more than EUR 4 billion, according to its owners.

"Hidria remains firmly rooted in Slovenia with existing investments - the one in Spodnja Idrija aimed at developing and manufacturing of electric motors' rotor and stator parts, valued at EUR 40 million, as well as with new planned investments," Hidria owners said.

"The partnership with Gonvarri will enable Hidria to increase global sales and production, as well as boost its influence and visibility in Europe and worldwide," they added.

15 Jul 2022, 14:03 PM

STA, 14 July 2022 - Employers wanting to hire workers from abroad are unhappy over how long it takes for the required paperwork to be approved, a round table debate hosted by the Chamber of Commerce and Industry (Gospodarska zbornica Slovenije - GZS) heard on Thursday. This is costing Slovenia a workforce it desperately needs, they said.

GZS representatives want the government to intervene and enable faster issuance of work permits. However, Labour Ministry official Grega Malec said the existing procedure was good and that the ministry was not thinking about making any interventions.

Employers also want Slovenia to strike new bilateral labour agreements.

Matevž Frangež, a state secretary at the Economy Ministry, said the debate showed changes must be made. His ministry is addressing the issues with a task force bringing together relevant ministries. He believes procedures must not be too complicated, but warned against abolishing safeguards.

Frangež believes there is room for improvement within the existing framework, also mentioning changes to administrative unit jurisdiction rules and the establishment of what he called a "virtual administrative unit" to handle work permit application backlogs.

Aleksander Vojičić, the head of the Administrative Unit Service of the Interior Ministry, said the problem lay in the lack of appropriately trained staff. At the end of last year, more were hired and backlogs have started to decrease, he said.

He added that the service had tried to change jurisdiction rules for administrative units, but "the response was not good". Sabina Hrovatin of the Migrations Directorate was critical of this option, saying the rules had their purpose: a local administrative unit knows the local employers best.

Meanwhile, Anton Pirih the head of Foreign Ministry's visa department believes procedures have to be simplified and safeguards relaxed.

14 Jul 2022, 15:56 PM

STA, 14 July 2022 - Electricity prices for households and small and medium-sized companies will be capped from 1 September to August 2023 under plans announced by the government on Thursday. Households will pay between 15% and 60% less for electricity than now, depending on provider, Infrastructure Minister Bojan Kumer told the press after the cabinet session.

Prices will be kept low through a combination of lower duties and measures that will reduce the profits of power generation companies, according to Kumer.

The excise fee on electricity will remain at 50% of the headline level, whereas the contribution for renewable sources will be cut in half come September.

Electricity prices for households and small business, including those in multi-apartment buildings, will be limited to EUR 0.118 per kWh at the higher tariff, EUR 0.082 kWh at the lower tariff and EUR 0.098 per kWh at the uniform tariff.

"These customers have so far been among the most affected groups of customers," the minister said, adding that the final cost of electricity on bills would be reduced for all household and small business customers, regardless of the supplier.

"It is a measure that directly addresses the increase in energy prices," the minister noted, estimating that savings for the average household customer would be between 15% and 30%, depending on how expensive their supplier is.

For customers of the suppliers with the highest price, the government measure means almost 60%, Kumer said.

In absolute terms, the regulation of electricity prices means EUR 110 to EUR 334 in savings in the annual cost of electricity for the average household customer or up to EUR 1,000 per year.

Kumer did not disclose exactly how prices will be kept low beyond saying that Slovenia was fortunate that electricity generation and distribution were in majority state ownership.

The government has been engaged in talks with stakeholders across the entire chain and they will "optimise costs" while eschewing some of the profits, he said.

Slovenian power generation companies have been able to sell electricity at market price driven by huge demand in the EU, whereas their underlying costs have changed little.

Kumer noted that this was the first package of measures dealing with electricity prices, which would surely be followed by another package. In the coming weeks, the government also plans to address the issue of high gas prices.

14 Jul 2022, 13:10 PM

STA, 14 July 2022 - Pharmaceutical company Lek has discovered an error in its calculations of wages which led to its staff being underpaid in the last 20 years by a combined total of about EUR 100 million. The company said it would reimburse all current and former employees for the last five years, as determined by law, with default interest for the last three years.

The error was discovered when the company switched payroll accounting providers and the new provider carried out a due diligence with an auditor.

Mistakes were detected in the calculation of allowances for absences from work such as holidays, sick leave and other forms of paid absence, and there were errors in the calculation of allowances for shift work, night work and for working in adverse working conditions.

According to the company, a thorough analyses was conducted to see which employees had been affected. "Social partners were included in the process of analysis from the very beginning," the company said.

Remedial measures were introduced on 1 May to compensate current and former employees for their losses since 1 January 2017. Employees will also receive interest for the money they should have received in the last three years, since 1 January 2019, Lek said.

Commercial broadcaster Kanal A reported last night that at least 3,000 employees had been affected since 2003, when Swiss pharma giant Novartis took over Lek, and some of the workers got about EUR 100 less a month because of the error, while the total damage had been estimated at about EUR 100 million.

Lek did not confirm these figures today.

An employee told Kanal A the staff had not been notified of the error until March. They demand compensation for the entire 20-year period. Under the law, they can claim back pay for only the last five years.

Kanal A reported that the pay slips at Lek in the last 20 years have been so complex that none of the employees was able to calculate or check the correctness of the pay calculation, which the in-house trade union confirmed in a letter to the employees earlier this year.

"There is reason to suspect that irregularities in payment out of wages, compensation, and the calculation of allowances have gone on for even longer. Lek has not actually denied this either," Rosana Lemut Strle, a lawyer for the employees, told Kanal A.

She hopes Lek will offer workers more than what they are legally entitled to.

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