Managers of fuel retailers Virši-A JSC and Neste LLC in Latvia say: the sanctions imposed by the European Union (EU) against Russian oil products will not cause threats for any shortage of fuel products in Latvia even though an impact on prices is real.
On the 5th of December 2022 EU sanctions for imports of Russian oil by sea came into force. This year – Sunday, the 5th of February – will mark the coming into force of sanctions prohibiting imports of Russian petrol products such as diesel fuel.
According to Virši-A board chairman Jānis Vība, it is expected this could create additional pressure on fuel prices, which is something already observed in the market, as petrol product prices are on a rise.
«The reason for this price rise – the EU will be left without the biggest supplier of diesel fuel in the region,»
said Vība, adding that the EU will need to continue adapting to the new reality and significantly increase imports from suppliers of diesel fuel outside of Europe.
He explained that turnover of petrol products in Latvia is not separate from the European market, because the reorientation of procurements of fuel products from other global markets (oil processing plants) creates longer, more complicated logistical roads, which in turn causes prices to go up.
Vība stressed that when it comes to accessibility of petrol products, Virši-A and most other fuel merchants in Latvia are able to secure sufficient supplies and independence of procured products from Russian oil resources. This is why there no risk of shortage is expected in the region.
Fuel retailer Neste Latvija board chairman Armands Beiziķis said that he sees no risks of Latvia experiencing a shortage of fuel as a result of ban on oil and petrol product imports.
«Fuel processing companies had enough time to prepare for these sanctions and plan out updated supply chains,» said Beiziķis, adding that last year Neste performed changes to oil supplies. This helped the company adapt to this ban on Russian petrol products.
Latvian Fuel Traders Association (LDTA) CEO Ieva Ligere said following the EU’s 6th package of sanctions the situation in Latvia’s fuel market has not changed, and there are no signs of an emergency coming up. She explained there is no worry in the industry, as the signed supply contracts are steadily being completed.
«Fuel traders have contracts signed for a year, and supplies continue. There is no way fuel will not arrive. The effect of the 6th package of sanctions will become clear in spring or summer, but not now,» said Ligere.
She also said any changes in Europe will have an effect on Latvia, as well as
prices across the entire European Union.
«Currently there are no signs that would suggest dramatic fuel price changes. Generally prices have been on a rise since December,» said LDTA CEO.
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