Serbia: Pančevo Refinery Operation Key to Fuel Market Stability, Minister Says

The consistent operation of the Pančevo Oil Refinery is vital for ensuring stability in Serbia's petroleum products market, according to Dubravka Đedović Handanović, the Minister of Mining and Energy. Following discussions with Tomislav Mićović, the Secretary-General of the Association of Oil Companies of Serbia, the minister highlighted the significant challenges currently facing fuel imports.

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Regular operation of the Pančevo Oil Refinery is crucial for maintaining stability in the petroleum products market.

Đedović Handanović explained that importing refined oil products has become considerably more difficult. Factors contributing to this include critically low water levels on the Danube River, which severely restricts barge capacity to 30-40% of normal levels. Additionally, global market disruptions and escalating prices for crude oil and Mediterranean benchmark crudes are further complicating supply chains. As a result, only about 25% of the planned July imports have been realized so far.

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Import of petroleum products has been significantly hampered due to low water levels on the Danube, disruptions in the global market, and rising prices of crude oil and Mediterranean quotations.

While transport by truck and rail can partially compensate for the shortfall, these methods are more expensive and contribute to already high prices. The minister noted that increased demand and import difficulties have depleted the stocks of wholesale oil companies. Although state reserves of diesel stand at 269,000 tons, with additional quantities expected, Đedović Handanović stressed that these reserves are a last resort.

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State reserves are a backup solution that we will use in emergencies, but the regular operation of the refinery is key to maintaining market stability.

She further suggested that extending the operating license for NIS (Naftna Industrija Srbije) would enable the Pančevo refinery to increase its processing and production capacity. This would significantly aid in overcoming the import challenges. Without an extended license, the minister warned, Serbia's supply would become heavily reliant on state reserves, particularly as consumption peaks and import conditions remain unfavorable.

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If NIS's license is not extended, supply will depend on state reserves, as imports are significantly hampered, the Danube water level is very low, and consumption is at its peak.