From next Sunday, no more Russian diesels will be allowed into the European Union. This import ban doesn’t look like it will cause any major famines at the moment, but the government is already preparing for a scenario where this will happen.
That is why the Cabinet today adopted the National Oil Emergency Plan. In the worst case, the state determines the sectors that need to be given diesel in any case. For this, a partial state of emergency decision may be taken.
rationing
This is the case when rationing is done and “distribution measures” are taken. It is not yet known which companies will be preferred. But a first, secret inventory was made.
In any case, emergency services such as ambulance, fire and police should have sufficient fuel. In addition, supplies to supermarkets need to continue and funeral homes need to be able to continue their work. If a famine lasts longer than three months, the Netherlands may impose an export ban.
Minister Jetten (Climate and Energy) has created a diesel reserve stock that will allow the Netherlands to take action for 90 days in the event of a diesel shortage.
What is the price of diesel?
There is currently no shortage. In fact, private individuals also built up large stocks in anticipation of the import ban. So much has been accumulated. The ministry sees that two or three times more diesel is imported than usual.
At the same time, when it comes to the price of diesel, no one dares to make a guess. For a long time at the end of last year, diesel was more expensive than petrol, and a liter of diesel cost well over two euros. Currently, the price of a liter of diesel is still under two euros and is also lower than the price of a liter of petrol.
It is obvious that diesel prices will increase again in Europe. That won’t happen immediately on Monday, says Lucia van Geuns of the Center for Strategic Studies in The Hague. “The Russian diesel supply needs to be replaced with diesel from other parts of the world,” she explains. “This happens on ships smaller than tankers carrying crude oil. These smaller tankers have to travel longer distances, which increases costs.”
dependence
Europe consumes more diesel than it produces and imports mainly come from Russia. Especially Central Europe is dependent on Russian diesel.
The Netherlands won’t be in trouble anytime soon, says Erik Klooster of Vemobin, the European oil refineries trade association. “The Netherlands is one of the few countries in Europe that produces much more diesel than it uses,” he says.
This is partly due to Shell and BP’s large refineries in the port of Rotterdam. These refineries are pipelined to Germany’s Ruhr region and supply diesel to a large part of Europe.
Russian fragrance
The coming months will show if dealers will succeed in replacing Russian diesel with diesel from other parts of the world. “It probably comes from Turkey, India and the Middle East,” says Lucia van Geuns.
It is possible that diesel still has a Russian smell. These countries import Russian oil and refine it into diesel, which is then exported to Europe. Russian diesel can also be mixed with diesel from other countries. This so-called “mixture” can be exported.
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
