Lithuania may tap strategic oil and fuel stocks to blunt a surge in pump prices. Officials promise targeted releases to stabilize markets without using state funds.
Lithuania is considering the use of crude oil and petroleum products from its strategic reserves to mitigate the effects of rising fuel prices caused by the conflict in the Middle East.
This was announced by the country’s Deputy Prime Minister for Energy, Gabrielius Gorbachevskis, during discussions on the issue of rising fuel prices, with the information confirmed by LRT.
«Our case will be mixed – part crude oil and various petroleum products, such as gasoline, diesel fuel, aviation fuel and other distillates», – said Gorbachevskis.
Our case will be mixed – part crude oil and various petroleum products, such as gasoline, diesel fuel, aviation fuel and other distillates
– Gabrielius Gorbachevskis
According to the deputy minister, releasing both crude oil and petroleum products will help stabilize global markets and ultimately lower prices.
«It is very important that different kinds of products enter the market thanks to the release of reserves – both oil and petroleum products – in order to achieve a positive effect on prices and, over time, stabilize them», – said Gorbachevskis.
It is very important that different kinds of products enter the market thanks to the release of reserves – and both oil and petroleum products – so as to achieve a positive effect on prices and, over time, stabilize them
– Gabrielius Gorbachevskis
He added that the fuel coming from Lithuania’s reserves comes from industrial stocks held by companies, so the move does not require spending from the state budget.
«The industrial reserve that companies must buy themselves will be released onto the market», – said Gorbachevskis.
The industrial reserve that companies must buy themselves will be released onto the market
– Gabrielius Gorbachevskis
The head of Lithuania’s Association of Oil Products Traders, Emilis Cizenas, doubts the success of using state reserves as an instrument to influence fuel prices.
I am not convinced that state reserves are intended to manipulate the oil market or influence prices. The result may prove to be the opposite if we release reserves now and then are forced to replenish them at a significantly higher price
– Emilis Cizenas
Last week the International Energy Agency allowed member states to release up to 400 million barrels of oil and oil products onto the market.
The government also states that this is a plan to support supply stability and lower prices should global supplies resume.
Energy Minister of Lithuania Žygimantas Vaičiūnas noted that the country could provide about 80 thousand tonnes of fuel from its reserves. It is also expected that soon a schedule detailing the volumes and timelines for the distribution of reserves over 90 days to curb oil prices will be published.
According to lawmaker Simonas Gentvilas, Lithuania’s strategic reserves currently hold about 640 thousand tonnes of fuel, of which about 330 thousand tonnes are crude oil and 240 thousand tonnes of diesel fuel.
It is also known that the governments of Japan and South Korea have decided to begin releasing oil from their strategic reserves amid reduced supplies from the Persian Gulf, aimed at ensuring stability of supply and gradual price reductions.
The Lithuanian government emphasizes caution in using reserves and continues to monitor global markets and the state of supply.