Polish Oil Company Profits Earns Billions From Russian Oil, Exploiting EU Exemptions – Politico

Screenshot of Center for the Study of Democracy report

This situation arose because the European Union exempted the Czech Republic from the ban on importing Russian oil following Moscow’s full-scale invasion of Ukraine. The exemption aimed to give Central European countries without sea access, such as Hungary, Slovakia, and Czechia, additional time to seek new fuel supply routes.

By using this exemption, Czechia allowed oil refineries to earn over one billion euros in surplus profits on Russian energy resources, as noted in the research.

According to the publication “Vazhnye istorii,” the Russian budget receives about $54.5 million per month from these sales. These windfall profits result from a 21% difference between the average price of Russian oil and alternative supplies from Azerbaijan.

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Hungarian foreign minister Péter Szijjártó also said that Budapest will veto European Union sanctions on Russia if the exemption for his country to purchase Russian oil is cancelled.

In 2023, the Czech Republic’s dependence on Russian oil increased to 60%, while in 2024, it is expected to decrease to 50%. Since the beginning of the war, the Czech Republic has spent over $7.6 billion on Russian oil and gas, which is five times the amount allocated for aid to Ukraine.

The reason for the continued imports, as stated in the analysis, is that Russian pipeline oil is sold at lower prices than alternatives, such as oil imported from Azerbaijan. This means it can be refined and sold as gasoline, diesel, and aviation fuel with higher profits.

In its defense, the Czech Ministry of Industry and Trade insisted the country is committed “to ending our reliance on Russian fossil fuels as quickly as technically possible.” The ministry noted it is working to boost the capacity of a pipeline linking it to Germany, Austria and Italy, aiming to fully divest from Russian oil by next year.”

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Publish date : 2024-10-15 22:16:00

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