TALLINN – Commenting on the regional decrease in oil stocks following the breakdown of an Austrian refinery at the beginning of this month, Priit Enok, member of the management board of the Estonian Stockpiling Agency, said that the agency is constantly monitoring the Estonian fuel market and the supply of motor fuels remains good.
On June 3, a breakdown occurred at a refinery of the Austrian fuel company OMV in Schwechat, near Vienna, which indefinitely postponed the restart of the plant that had been undergoing maintenance at the time. As the incident has led to a significant reduction in the supply of petroleum products to the region, Austria and Hungary decided to partially deploy their national fuel reserves, the Estonian Stockpiling Agency said.
Enok described the problems encountered at the Austrian refinery and the resulting regional supply problems as a good illustration for why countries need national fuel stockpiles.
"The rapid response of Austria and Hungary in releasing their stocks prevented a shortage of gasoline and diesel at the filling stations there. Instead of a refinery, fuel companies received their usual amounts of gasoline and diesel from a supply controlled by governments, and consumers may not have noticed the supply disruption," Enok said in a press release.
In Estonia, he explained, the system works in exactly the same way. If the refineries at Mazeikiai, Lithuania, or Porvoo, Finland, which mainly supply the region, were to experience a significant drop in production, the government can decide to deploy Estonia's national reserves.
"The Estonian Stockpiling Agency analyzes the Estonian fuel market on a continuous basis and the supply of motor fuels remains good. As a rule, all our fuel companies have long-term supply contracts and the inventories of commercial stocks have even increased somewhat in the spring months," Enok said.
As at the beginning of June, Estonia's stocks gasoline, diesel and aviation fuel totaled 250,000 tons, equaling 90 days' regular consumption. Of this amount, a stock for 49 days was located in Estonia and a stock for 41 days in Finland and Sweden. According to data for 2021, an average of 570 tons or 770,000 liters of gasoline, 2,130 tons or 2.58 million liters of diesel and 175 tons of aviation fuel are consumed in Estonia per day.
National liquid fuel reserves are only mobilized by a decision of the government in the event of serious supply difficulties or to meet international commitments. The reserve is not intended to be used in a situation where oil prices are very high but there are no problems with the availability of motor fuels. According to the Estonian Stockpiling Agency, history has shown that attempts to influence market prices by acquiring or placing stocks on the market have had only short-term economic effects.
Since the formation of the Estonian national fuel stockpile in 2005, the stockpile has been used twice -- with both times occurring this spring, when Estonia joined the international energy agency IEA's solidarity action to alleviate global supply failures by releasing 15,000 tons of diesel.