Czech state to release 100.000 tonnes of oil from emergency reserves to refineries

The state will lend domestic refineries 100.000 tonnes of oil from its emergency reserves. The reason is reduced supplies via the IKL/TAL pipeline. The government approved the move today, Prime Minister Andrej Babiš (ANO) said at a press conference. According to the Administration of State Material Reserves (SSHR), supplies of motor fuels to the Czech market continue to function normally and there is sufficient fuel. Former Industry and Trade Minister Lukáš Vlček (STAN) criticised the release of reserves, calling it an irresponsible step.

According to Babiš, the administration will begin supplying the reserves to Orlen Unipetrol refineries from 1 April. He stressed that this will be a loan and that the refineries will return the reserves. Industry and Trade Minister Karel Havlíček (ANO) subsequently explained that the loan is intended to ensure the stable operation of refineries in Czechia and uninterrupted fuel deliveries to filling stations. According to him, the need for the loan stems from maintenance and reconstruction work on the TAL pipeline, which had been planned well in advance. The related restrictions and the current situation on the oil market have, Havlíček said, led to a situation in which oil flows through the pipeline at a lower rate while demand is rising.

Former industry minister Vlček criticised the government's decision. "In the current situation, this is a nonsensical and extraordinarily irresponsible step. These state reserves serve as a safety net in the event of an extreme emergency and are not intended to influence market prices, but to ensure that the state and its critical infrastructure do not cease functioning when oil supplies are interrupted," he said.

According to the reserves administration, there will be no problem with the swift release of the reserves. "We went through a similar situation several times last year, for example when operations on the Druzhba pipeline ceased overnight or when supplies via the IKL/TAL pipeline were reduced due to reconstruction of the port jetty in Trieste," SSHR chairman Pavel Švagr said.

According to him, Czechia still has sufficient petrol and diesel, so motorists have no reason to stock up. "State reserves are fulfilling their role; we have stocks for 88,5 days and, if necessary, we will release more," Švagr added.

Oil currently flows into Czechia only via the western route, through Italy's TAL pipeline and the connecting IKL pipeline. Until the start of last spring, oil also flowed into Czechia via Russia's Druzhba pipeline, but supplies through it were halted in early March last year. However, in the spring of the same year, the TAL pipeline, which begins in Trieste and receives oil from multiple countries and continents, was expanded. The largest share of supplies comes from areas around the Caspian and Black Seas, followed by the United States and Africa. According to the government, the expansion enabled the Czech Republic to completely cut itself off from Russian oil.