If they don't reach an agreement, they will store fuel with their neighbors: The state begins negotiations on storing oil reserves

Montenegro does not yet have the capacity to store mandatory fuel reserves, although their procurement is planned for December this year. The terminal in Bar, which is owned by the state-owned company Montenegrobonus and where the supplies should be stored, will not be technically ready before the end of 2026. That is why the Government is preparing a backup plan - if an agreement is not reached to store them in Jugopetrol's tanks in Bar, the reserves will be stored abroad. Terminals in Italy, Croatia, Slovenia and Greece are in circulation, with which Montenegro is trying to establish formal cooperation and secure consent for storage. Lease agreements for these capacities should be multi-year, and storage would begin as early as December.

This is stated in the Government's Oil Reserves Formation Plan for 2025, which was adopted at the session last Thursday.

Negotiations with Jugopetrol are planned immediately after the adoption of this plan, the document states.

The first quantities of mandatory reserves, the procurement of which is the responsibility of the Hydrocarbons Administration, are expected in December of this year, so for 2025, the lease of storage capacities is planned for at least three years, with the start of lease/storage in December.

"The available state-owned oil storage capacities at the Bar Terminal represent a priority for storing mandatory reserves, due to their location, size and technical capabilities. However, these storage capacities will not be available before the last quarter of 2026, due to the need for their reconstruction to bring them into proper technical and technological condition, which means that, in the meantime, it is necessary to ensure additional storage capacities on a multi-year basis," the government document states.

Second tender for reservoir repair underway

The tender for the adaptation of oil tanks in Bar was announced at the end of last year and offers could be submitted until February 12, but since no offers were received, the then Ministry of Petroleum and Mining (now the Ministry of Energy) announced a new tender in mid-May and it is ongoing. This tender is worth 1,7 million euros excluding VAT.

"In 2025, the Hydrocarbons Administration plans to store its mandatory reserves in physical form in Montenegro in storage facilities at the Bar Terminal. However, if the Bar Terminal operator Jugopetrol does not have available capacities or does not offer a competitive price when determining the storage conditions, the Administration will store its mandatory reserves abroad, which is a legal option provided for by the Law. In that case, the reserves will be stored abroad until storage capacities in the country, owned by the state, become available. The key prerequisite for the formation of mandatory reserves of Montenegro abroad is the consent/approval of the host country for the storage of Montenegro's reserves in that country. Therefore, the Administration will encourage the Ministry of Energy to intensify cooperation with the relevant ministries in Italy, Croatia, Slovenia and Greece to establish a formal legal and operational framework for the formation of mandatory reserves of Montenegro in those countries, in order to create alternative storage options and strengthen the negotiating position in relation to the Bar Terminal operator," the document states.

It is further stated that during this year, the Administration will provide support to the Ministry of Energy and other competent state bodies in regulating relations between the state and Jugopetrol regarding the management of oil storage facilities that are jointly owned by the state and Jugopetrol.

In December last year, the Parliament adopted the Law on Security of Supply of Petroleum Products, which is essential for the closure of Chapter 15 (energy) and requires the formation of oil reserves.

They expect 11 million in compensation.

The Hydrocarbons Administration and every importer of petroleum products that imports 15.000 tons or more of unleaded gasoline and/or gas oils are obliged to form mandatory reserves. The oil companies "Jugopetrol", "Ina Crna Gora" and "Petrol Crna Gora" will be obliged to form oil reserves together with the state this year.

The formation of oil reserves between now and the end of 2028 will require 44,5 million euros, of which 7,5 million will be provided as a grant from the European Union to overcome the energy crisis, and the rest of the money will be provided through a special fee paid by citizens and businesses in the amount of three cents that will be added to the retail price of fuel. This fee began to be charged on February 10.

"By July 20, 2025, EUR 5.654.738,49 was paid into the revenue account as a fee for mandatory reserves, i.e. an average of slightly more than EUR 1,1 million was paid monthly. Given the current and projected market circumstances until the end of 2025 (oil product prices, storage costs, capital costs and ticket value), no change is expected in the total amount of the fee (three cents per liter) until the end of 2025, nor is there a change in the method of distributing the fee between the Administration and importers who have formed mandatory reserves. Taking into account the fee paid by July 20, and the assumptions that importers will form their reserves by October 10 of this year and that the amount and distribution of the fee will remain unchanged until December 31, it is planned that by December 20 of this year (the last day for paying the fee for November 2025), around EUR 11 million will be paid into the revenue account." it says in the government document.

It will procure between 14.000 and 19.000 tons of diesel

The Hydrocarbons Administration will purchase between 2025 and 14.000 tons of diesel in 19.000, which is still far from the amount it should purchase according to the Ministry of Energy's Instruction.

"If the available amount of collected financial resources, based on the collected fee, amounts to 11 million euros, in that case the Administration would plan to purchase 14.000 tons of diesel, and if the available amount of collected financial resources and European Commission funds amounts to 14 million euros, in that case the Administration would plan to purchase 19.000 tons of diesel. The estimate is based on the purchase value of the goods, which currently amounts to 750 euros/ton, with the value of the goods excluding excise duty, given that the goods would be stored under the deferred excise duty regime," the document states, adding that in any case the Administration will purchase the maximum amount of diesel for the available amount of financial resources collected by 20 December 2025."

The European Commission is expected to provide a payment of three million euros as direct budgetary support to overcome the energy crisis.

Physical delivery of diesel is planned for December 2025, and the tender will be conducted in cooperation with the Ministry of Finance.

"Given the demanding procurement deadlines prescribed by the Public Procurement Law, the procurement procedure will begin immediately after the adoption of this Plan. Upon the adoption of this Plan, the Administration plans to begin negotiations on storage at the Bar Terminal, and a public call will be sent to warehouses abroad (Croatia, Italy). The planned storage cost is 5 euros/ton per month, and in 2025, the storage cost will be paid only for December 2025, when the diesel delivery is planned," the document explains.