Finance minister hails use of oil reserves as key support for fuel prices

VILNIUS - Lithuania’s Finance Minister Kristupas Vaitiekunas said on Tuesday that using part of the country’s oil and petroleum product reserves is the most effective measure to cushion rising fuel prices.

"The most effective measure has already been adopted, which is the use of the fuel reserve. The Energy Minister mentioned that this could affect the price of diesel by 10 or even more cents. Given that the price increase is about 30 cents, I believe this is truly very, very significant support," Vaitiekunas told reporters.

He added that if the conflict in the Middle East prolongs, targeted aid measures may be needed to maintain economic stability.

"This includes energy-intensive businesses and the most vulnerable groups of residents. Here, some targeted support could be considered," he said.

Regarding President Gitanas Nauseda’s idea of managing fuel price increases with daily fuel price caps, the minister said such a measure would have a limited effect.

To curb rising fuel costs, Lithuania plans to release both crude oil and fuel reserves, using about 80,000 tonnes - roughly 12 days worth - of the industrial reserve over 90 days.

Two-thirds of the reserves are held by private companies, with the largest share managed by Orlen Lietuva, the only oil refining and import company in the Baltic States, controlled by Polish energy concern Orlen. The remainder is held by the state.

On Monday, Prime Minister Inga Ruginiene said releasing the reserves would have a near-term impact on fuel prices.

Some business representatives questioned whether supplying reserves to the market was necessary and whether they would later need to be replenished at significantly higher prices. Analysts have said the measure will likely have a small and short-term impact.

In total, Lithuania has accumulated a reserve of 650,000 tonnes of oil and petroleum products.