Rising oil prices, geopolitical crises and announced blockades of carriers have reopened the issue of energy market stability and supply chain resilience.
The key mechanism for reacting in such situations in the Federation of Bosnia and Herzegovina is the mandatory reserves of oil and oil derivatives, which are managed by the Terminals of the Federation.
Damir Kreso, president of the FBiH Terminal Management Board, spoke about this topic in Dnevnik D.
Infrastructure as a key issue: without storage there is no security
Speaking about oil storage capacities, Kreso points out that infrastructure is the biggest challenge.
– Our only operational terminal at the moment is the recently renovated one in Blažuj. The terminal in Bihać is being reconstructed, Živinice is being expanded, and Mostar is being prepared for the next phase. When they are all finished, the total capacity would be around 220 thousand cubic meters – said Kreso.
He emphasizes that BiH does not have a refinery, but that is not the biggest problem.
– Perhaps a bigger challenge than the refinery is the lack of storage capacity. If we already import fuel, we must have a place to store and keep it – he added.
Terminal Ploče – a key supply point
Speaking about regional connectivity, he singles out Ploče in particular.
– About 80 percent of oil products for Bosnia and Herzegovina enter through the terminal in Ploče. It is the most important infrastructural facility for supply. Without that terminal, fuel in the Federation would be 5 KM – stated Kreso.
However, the problem remains an unresolved legal status.
– We are working on solving property-legal issues with Croatia. It is a long process, but I expect that by the end of the year we will have a solution that will enable the stable use of that terminal – he emphasized.
Stable supply of oil in the Federation of Bosnia and Herzegovina, there is no reason to panic
The supply of oil derivatives in the Federation of Bosnia and Herzegovina is stable and there is no reason to panic despite the global disruptions caused by the crisis in the Middle East, the competent officials said, emphasizing that sufficient reserves have been secured for key sectors, while price growth and market movements are mainly…
– The terminals of the Federation were established by the law on oil derivatives in 2014 and their main role is to preserve reserves of oil and oil derivatives for the needs of the Federation. When we say reserves, we mean quantities that are used exclusively in emergency situations – disruptions, wars, supply interruptions or natural disasters, when the supply chain is interrupted.
He also emphasizes that this institution has no influence on fuel prices.
– Terminals have no role in pricing. The market is regulated, there are clearly prescribed margins and supervision by the Federal Ministry of Trade and Inspection.”
How long can reserves last in the event of a crisis?
Speaking about the current stocks, Kreso points out that the first serious capacities were established recently.
– At the end of last year, we formed serious reserves for the first time by putting into operation the terminal in Blažuj with a capacity of 42 million liters. A railway connection with Ploče was also established, thus opening an important logistical route for the delivery of larger quantities of fuel – said Kreso.
It also explains how these reserves are used in practice.
– In the event of a crisis, the Government of the Federation decides to whom and in what quantities fuel will be allocated. These are primarily hospitals, police, firefighters and other key services. We now have sufficient reserves for the functioning of these services, and they can last for a longer period: we are talking about months, depending on consumption and the extent of the crisis – he stated.
Why are accurate stock figures not published?
When asked about transparency, Kreso highlights the security aspect.
– No country in the world publishes the exact amount of its reserves. There is an obligation to have stocks for a certain period, 90 days of import or 60 days of consumption, but specific figures are not disclosed to the public for security reasons – he explained.
Reserves are not for citizens, but for key services
It especially emphasizes the difference between government reserves and commercial stocks.
– State reserves are not used for price stabilization or for general consumption. They are intended exclusively for emergencies. Citizens depend on supplies from private distributors – Kreso added.
He adds that the Government’s new decision goes in the direction of strengthening that segment.
– By renting storage capacities to private companies, we increase the total stocks in the country. In such cases, the government has the right of first refusal and can react quickly if additional fuel is needed for the system – he explained.
Financing and controversies about spending money
Kreso rejects claims that funds are spent on administration.
– Terminals are financed from one pfennig per liter of fuel, which amounts to approximately 9 to 9.5 million marks per year. That money goes to the construction of the terminal, procurement of reserves, maintenance and operation of the system. In the last two years, about 25 million were invested in the Blažuj terminal, 24 million in Bihać, and more than 15 million in the procurement of oil and derivatives in the last 6 months. This clearly shows that the funds go to development and reserves, not to administration – he pointed out.
BiH is far behind the region in terms of investments in reserves
Comparing with the region, he points out a significant lag.
– In Croatia, there are about 5 pfennigs per liter, in Serbia 4 pfennigs, in Montenegro 6 pfennigs, while in our country there is only one pfennig. This means that we are financially far behind and that we are building capacities more slowly. If we increased the allocation to three or four pfennigs, we could speed up the construction of the terminal three to four times and increase the reserves – Kreso stressed.
He points out that fuel prices have not risen significantly, which is also shown by the fact that citizens of neighboring countries refuel in the border towns of Bosnia and Herzegovina.
The influence of global crises and prices on the formation of reserves
Speaking about the current market disturbances, he emphasizes caution in procurement.
– The rise in oil prices also affected us. We had planned deliveries, but we stopped them because it makes no sense to buy reserves at the highest prices. We are waiting for the stabilization of the market, so we will continue with the procurement – concluded Kreso.
He adds that he expects the situation to calm down.
– Prices will return to normal, because this kind of pressure on the energy sector is not sustainable.
Possible blockages and system readiness
At the end, he looks at the announced protests and possible supply disruptions.
– If there are border blockades, certain disruptions in supply will certainly occur. However, measures have already been taken: distributors are increasing stocks, railways are stepping up transport, and terminals are ready for logistical support.
It concludes that the system has a certain level of readiness, but also limitations.
– In a sense, we are ready, but blockades can always cause unwanted disturbances. I hope that a solution will be found quickly so that citizens do not feel the consequences, he writes Press Media BiH.
