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Petroleum industry

NIS to Remain Sole Crude Importer in Serbia until 2013

Strategic Insights

— 2 min read

Oil company NIS, controlled by Russia's Gazprom, will continue to hold a monopoly on crude oil imports in Serbia until at least 2013 due to a lack of storage capacity among potential competitors. Although new government regulations lifted the monopoly and stipulate that only companies with at least two separate storage facilities with a minimum capacity of 500 cubic meters each can import crude oil, NIS remains the sole operator meeting this requirement. Industry analysts predict that it would take a new entrant at least two years to build the necessary capacities, indicating that NIS's de facto monopoly will persist until 2013.

Key Takeaways:

  • The new government regulations in Serbia, which took effect on January 1, aim to ensure a sufficient supply of oil imports and prevent market destabilization.
  • The regulations stipulate that only companies with at least two separate storage facilities with a minimum capacity of 500 cubic meters each can import crude oil.
  • NIS, controlled by Russia's Gazprom, is the sole company in Serbia meeting the new requirement, holding a monopoly on crude oil imports until at least 2013.
  • The minimum capacity required for storage facilities is 500 cubic meters, and it's predicted to take at least two years for a new entrant to build sufficient capacities.
  • Local oil products trader Petrobart and Russia's Lukoil are increasing their storage capacities but it remains uncertain if they will be able to meet the new requirement.
  • The Serbian government has the responsibility to regulate the local market to ensure adequate supply, according to Slobodan Sokolovic, assistant to Serbia's Energy Minister Petar Skundric.
  • Serbia awarded NIS a monopoly on oil trade in 2001 to increase budget revenue, and the government aims to lift the privilege once the country's oil refineries recover from past damage.

Statistics:

  • Demands 90 days' worth of oil consumption be maintained in reserves
  • Oil importers in EU member Slovenia can store nearly a quarter of their delegated supply in other EU member states
  • Hungary's legislation for licensing oil importers requires a minimum storage capacity and a guarantee of 80 million Hungarian forints ($397,347/291,721 euro) to the tax office
  • Serbia formally applied to join the European Union in December 2009
  • NATO bombed Serbia in 1999, causing damage to its oil refineries
  • The period specified for NIS to remain the sole importer due to lack of competitors' capacities is until 2013

Sources:

  • Energyobserver.com, "New Government Regulaton makes NIS Sole Importer of Crude Oil"
  • SeeNews, "Serbia's NIS remains sole crude importer until 2013"
  • IREET, "Stabilisation and Association Agreement with Serbia approved by EU Parliament"
  • Hungarian Hydrocarbon Stockpilling Association, "Importing crude oil in Hungary"
  • Petar Skundric, Serbia's Energy Minister, "Regulating the local market to ensure adequate supply"

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