Montenegro will form oil reserves by adding a special fee of three cents to the retail price of fuel. The State Administration for Hydrocarbons will have the obligation to keep a third of the required reserves, while private importers are required to provide and keep two thirds of the required reserves at their own expense.
This is stated in the Draft Law on Security of Supply of Oil Derivatives, which the Government plans to adopt by the end of April and send to the Parliament for consideration. Collection of this special fee would begin immediately after the adoption of the law.
From the process of accession to the European Union, Montenegro has the obligation to form reserves of oil derivatives in the amount of at least three months' consumption or import, while the modalities of their formation are left to the states to choose themselves.
In the draft, it is stated that the Hydrocarbons Administration should form its reserves from fee collection by June 30, 2025, while the general deadline for their final formation is July 2027. The obligation applies only to importers of petroleum products, so the current owners of gas stations can avoid this obligation if they buy fuel from another importer who has warehouses.
PKCG: Law full of shortcomings
The Group of Distributors of Petroleum and Petroleum Derivatives at the Chamber of Commerce told "Vijesta" that the draft law has a lot of ambiguities, that the structure of reserves for importers is not defined, that the importers are obliged to form warehouses of petroleum derivatives and to us in the spatial plan, which brings them into unequal position those who now have warehouses...
The Association of Oil Companies, which gathers mostly domestic smaller importers and traders of oil derivatives, says that the draft law was created in such a way as to protect the dominant position of Jugopetrol, which is the only one with warehouses, to impose obligations on domestic companies that they cannot fulfill financially, to force the law that they pay for services to their direct competitor Jugopetrol, as well as that all this will lead to their shutdown. From this association, they state that one version of this law was at the public debate, and that a completely different version has now entered the procedure for adoption by the Government, which they consider to be an incorrect relationship and manipulation of the public debate.
Reserves make up consumption for three months
The Ministry of Energy and Mining told "Vijesta" that the draft law was innovative, received a positive opinion from the Secretariat of the Energy Community, and that they expect it to be sent to the Government for confirmation by the end of the month, and that they will then ask the Assembly to adopt it as a matter of urgency. procedure because "failure to adopt the law could cause harmful consequences.
As they stated, the minimum amount of mandatory oil reserves that Montenegro is obliged to form will correspond to the amount for 90 days of average daily net import or 61 days of average daily consumption, whereby the amount that is greater will be taken into account.
The Administration for Hydrocarbons will have the obligation to form strategic reserves in the amount of a third of the total amount and must store them on the territory of Montenegro.
"The rest of the obligation would be formed by oil companies that import oil derivatives, while importers are not imposed the form in which these goods should be. Those obliged to form reserves are given the flexibility to choose to form reserves, either through physical storage of the goods in the finished product or in the form of so-called "tickets" which represent a type of agreement on the reservation of goods with the right to purchase and withdraw at any time", the Ministry stated.
Importers of quantities of less than a thousand liters are exempted from this obligation.
Reserves are private, but the Government decides
"Although mandatory reserves of oil derivatives are formally owned by importers of oil derivatives, the Law on Safety of Supply of Oil Derivatives regulates that in order to ensure a safe supply of oil derivatives, especially in case of disruptions in supply, or in case of risk of disruptions in supply, the decision on release of mandatory reserves of oil derivatives and the implementation of other measures is adopted by the Government of Montenegro. Therefore, importers, as well as companies that trade in wholesale and retail oil derivatives, together with the Hydrocarbons Administration, are obliged to implement measures in accordance with this decision. This ensures the stability of the oil market and enables solving a potential disruption in the supply of oil derivatives", the Ministry stated.
The Law states that the fee for the formation of reserves will initially amount to three cents per liter of gasoline, gas and diesel, and that after the formation of the first amount it may be lower depending on the costs of storage and management of reserves.
President of the Oil and Oil Products Distributors Group Vladimir Klikovac he told "Vijesti" that the proposed text of the law has a lot of ambiguity, which gives the possibility of different interpretations of obligations for importers.
"The draft law does not define the structure of mandatory reserves for the importer, i.e. quantity in finished product and quantity in tickets. Through one of the articles of the law, it is stated that the obligation of the importer is to keep the mandatory reserves in both indicated forms (finished product and ticket). The importer has an imperative norm throughout the entire text of the proposed legal solution, while a more liberal norm is provided for the Administration (in a certain paragraph of the article) through the clause 'may' (which means it does not have to) have certain amounts of mandatory reserves", said Klikovac.
Only one has a warehouse, there are no others even in PP
He states that the obligation of storage is imposed on private importers, regardless of whether they have storage capacity in Montenegro, in addition to the fact that only the largest importer has storage capacity. Importers are given the option of storage in EU and Energy Community countries, and he notes that Croatia stores its reserves in Germany.
"With the unclear interpretation of the criteria for access to warehouses, which appear in the draft law as four, and sometimes as two, then all this seems to me to further complicate the enforceability of the law. The financing of mandatory reserves is foreseen through the collection of compensation, but this proposal does not determine the distribution of compensation, but will be regulated through secondary legal acts, which is another unknown, and importers are imposed an obligation through an imperative norm", said Klikovac. In the event that importers do not fulfill their obligations regarding the formation of reserves, the penalty is a ban on activity.
"The proposal of the Spatial Plan does not indicate any location for the construction of warehouses for these purposes, which means that there is no indication for the development of this sector on equal market conditions," said Klikovac.
Gojčaj: The law favors the largest importer
President of the Association of Oil Companies Nreka Gojčaj he told "Vijesti" that they are very dissatisfied with the new version of the law that has now been delivered to them, which is why they sent several letters to the director of the Directorate for Oil and Gas during March. Zorani Sekulić, who prepared the law, as well as the Minister of Energy and Mining To Saša Mujović.
"The proposed law is an additional attempt to strengthen the monopoly positions of the largest importer, to the detriment of the free market, by deliberately planning to hinder free imports for all domestic companies, by abusing the authority during the drafting of this law," said Gojčaj.
He said that for 22 years, with the decision on the formation of retail prices, they have had the same margin, which is about five cents per liter, while in the meantime their costs have grown significantly.
"Only one trader of oil derivatives in Montenegro - Jugopetrol can now fulfill these legal requirements. We believe that the state cannot and must not, nor is it in accordance with domestic legislation and EU directives, to adopt legal solutions that would endanger the economy and the free market and possibly create and strengthen monopolies," said Gojčaj.
He states that they could avoid the millions of costs for the formation of reserves only if they stopped being fuel importers, and if they bought fuel from their direct competitor, Jugopetrol.
The Ministry is silent on obligations and forgives the debt to Jugopetrol
Last year, the state finally returned to its ownership the oil warehouses in the Port of Bar, Lipci and Bijelo Polje, after the final verdict of the Supreme Court in 2016 that Jugopetrol used them illegally.
After the sale of this company to the Greek "Hellenic Petroleum", it continued to use these storage facilities even though they were not part of the purchase agreement. They were supposed to be used by the state Montenegro bonus since 2003, but he received them only 20 years later in a ruined state.
The Ministry of Energy and Mining did not respond to the question of whether they will seek compensation from Jugopetrol because they used state warehouses for free for 20 years.
It was stated that the warehouses will be renovated with 7,5 million euros, money that the state received from the European Commission for overcoming the energy crisis, in order to use them for storage and procurement of mandatory reserves.
This department did not even answer the question whether Jugopetrol fulfilled the obligations from the Guarantee Investment Program specified in the Purchase Agreement 20 years after privatization.
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