Mazeikiu refinery goes on the defensive

  • 2005-09-14
  • From wire reports
VILNIUS - Soaring gasoline prices have forced the Mazeikiu Nafta oil refiner to defend its financial integrity, with company officials demonstrating that gas sales in Lithuania only comprise 20 percent of the company's total profits.

It also said that 80 percent of its earnings resulted from business in the U.S.A., Western Europe, Latvia, Estonia and Poland.

In recent days, the refinery - the only in the Baltics - has come under intense fire for high prices. Prime Minister Algirdas Brazauskas and Latvian Economy Minister Krisjanis Karins have both criticized the oil refiner.

The refinery maintains, however, that gasoline prices are surging throughout the world due to Hurricane Katrina, global demand and other factors.

The concern said that it had been buying crude at Platt's prices since 1997, and had been using the same tariffs to estimate its product sale price.

"We live in Europe, accordingly we use the Platt's rates at Amsterdam, Rotterdam and Antwerp ports. Other mechanisms for sale-price estimation by a company active on the global market are ineffective," the company pointed out.

Last year, Mazeikiu Nafta's sales of gasoline and diesel fuel on foreign markets comprised 86.5 percent and 76.9 percent, respectively, of total sales for those types of fuel.

Mazeikiu Nafta, which is controlled by the moribund Russian oil company Yukos, posted 378.9 million litas (109.8 million euros) in unaudited consolidated earnings for the first half of 2005, a surge of 63.2 percent from the year-earlier figure.

Yukos holds 53.7 percent of Mazeikiu Nafta, while the government controls a 40.6 percent stake.