State Secretary of the Ministry of HN: Slovakia can replace the economy with 70 percent of Russia’s gas
Europe application on the ban on imports of Russian oil and fuels, will embargo be imposed?
Slovakia will not veto demand, but at the same time we demand that Europe be in solidarity. The sanction affects not only Russia but also the EU itself and some countries specifically. Slovakia, as a 100-percent country dependent on Russian heavy oil, would be most affected by such an embargo. Therefore, we also expected a transitional period, which was to apply only to oil transported by pipelines. This makes up ten to twenty percent of the volumes that are imported from Russia each year. the replacement is tanker transport, which can be replaced more easily and quickly. The Slovnaft refinery is set up for Russian heavy oil, from which we can produce about 50 percent of diesel and 23 percent of gasoline. As soon as it changed, less diesel would be produced and in its case there could be an acute shortage in the market. Today, it constitutes consumption, which would in turn affect the price. This was communicated with the Czech Republic in unison with the Czech Commission. Hungary claimed a long-term exemption, and we said that we needed three years to be able to prepare technologically, including piping systems – in the case of the Druzhba oil pipeline from the east and the Adriatic system from the south, which has a main throat in Croatian territory, which restricts transport from ports. Without these changes, Slovnaft would have been able to receive about 400,000 tons of oil per month, which would cover about 70 percent of current production. Slovakia would then close and we would only produce on the domestic market. Given that part of current production also applies to neighboring countries, this means that reduced production represents a reduced supply and, ultimately, an increase in the domestic price.
What are Slovakia’s stocks?
These are reserves at the level of 108 days. Part of the storage facilities is located in the east of Slovakia and it is true that in the event of an interruption of oil supplies from Russia, we could have exhausted the commodity stocks, but not refilled them.
So there will be an embargo. What else are the questions?
Negotiations are still ongoing, as part of the sixth sanctions package. This is not the only open question. Cyprus, for example, is dealing with real estate owned by the Russians. However, the issue of Russian oil is fundamental.
Is there a willingness on Brussels to accept exceptions, because apart from us and the Hungarians, do we know that the Poles need Russian LPG and the Austrians need Kazakh oil?
I would not talk about exceptions, but rather about transitional periods. Because I do not want to subsidize the war in Ukraine caused by the Russian aggressor. For example, it must be determined which routes the Kazakh oil would take, whether it would be a pipeline within Russian companies. Sanctions must be more harmful to Russia than to the EU. We have made progress in the negotiations and it seems that a transitional period could be a reality for us. Our request was for a transitional period until the end of 2025. The Union said that it would be able to contribute to our investment in the transition from Russian oil, but we had to draw on existing programs. There are several mechanisms, be they the Structural Funds or the Recovery Plan, the Modernization Fund or the Fair Transformation Fund. It should be borne in mind that Ukraine is the hardest hit by the war and it is not the whole of Europe. Unless we support the functioning of our economies, then we will not be able to help Ukraine. Slovakia is the fourth country in the world in terms of GDP, which contributed most to Ukraine’s ability to function during the war and to resist Putin.
The embargo should also be the import of oil from Russia and Belarus, which, according to the head of Slovnaft, would result in a rise in prices in our region. Will we request a transitional period here as well?
In the case of fuels, it is more a matter of Poland taking the final products. In our case, if we take enough REBKO heavy oil, we can supply the region in many ways than before. Slovnaft can also produce for Poland, Austria and the Czech Republic, southern Poland.
The price of Russian oil taken by Slovnaft is lower than that of Brent oil. Does this result in a sufficient fuel price or does it need to be addressed?
Publicly available statistics show that Slovak fuels are the fifth to sixth cheapest in the European Union. This means that the difference is to some extent. I think more could be done. However, this is a question for the Ministry of Finance, which proposes taxing the difference in the price of oil itself.
You are a member of a SaS party that does not agree with the oil tax as it would burden prices. What solution do you think would be appropriate?
We are worried about what the money will be used for. The proposals say it will be overeaten and misused. We see space in that if we manage the oil itself so that it is reflected in the final price …
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