Liquid fuel reserves in Estonia enough for three months

Liquid fuel storage facility in Paldiski.
Liquid fuel storage facility in Paldiski. Source: Priit Mürk/ERR

The Estonian Stockpiling Agency (ESPA) and fuel sellers have enough liquid fuel reserves in Estonia to cover almost three months' consumption. The agency also maintains stockpiles of gasoline, diesel and aviation fuel for another six weeks abroad.

In connection with Russia's increased military activity last winter, the government tasked ESPA with boosting liquid fuel reserves kept in Estonia. In less than a year, the agency has increased reserves from 45 days to 55, which activity continues today," Martin Jaško, press representatives for ESPA, told ERR.

"In addition to ESPA reserves, Estonian fuel retailers usually keep a month's worth of reserves," he added.

Estonia started its liquid fuel reserve in 2005. Based on the Liquid Fuel Stocks Act, Estonia needs to maintain gasoline, diesel and aviation fuel reserves enough for 90 days of ordinary consumption, at least 30 days worth to be kept in Estonia.

Jaško said that ESPA plans to keep a small part of the stockpile abroad also in the future as it adds a measure of flexibility in international cooperation. He gave the example of the spring of 2022 when the International Energy Agency (IEA) organized a joint action that saw Western countries add liquid fuel quantities to the market to soften the blow of a potential Russian oil products shortage following the latter's invasion of Ukraine. Estonia participated, selling 15,000 tons from its reserves.

Car owners pay €7 a year for the national fuel stockpile

Jaško explained that the agency's revenue comes from the state budget and stockpiling fees. Companies bringing fuel to the market have to pay a stockpiling fee that totals around €5 million annually.

"A very small part of sums paid for every liter of fuel go toward the stockpiling fee. The average drivers pays around €7 in the stockpiling fee every year," the agency representative said.

The ESPA website reveals that the current stockpiling fee rates are 0.4 euro cents per liter for diesel, 0.47 cents for gasoline, 0.7 cents for jet fuel and 0.4 cents for heavy fuel oil.

Gas station. Source: Ken Mürk/ERR

From May this year, the fee will also apply to natural gas users, which proceeds ESPA will use to maintain natural gas stockpiles, Jaško added.

Existing liquid fuel and gas reserves have been paid for from the state budget. Since the start of 2022, Estonia has allocated €213 million in ESPA share capital to create strategic natural gas reserves, rotate liquid fuel reserves kept abroad and create capacity in Estonia to receive LNG.

Healthcare and food stockpiles are created and maintained, and resilience promoted based on an administrative contract with the Ministry of Economic Affairs and Communications in the total volume of a little over €6 million.

ESPA also in charge of food and medicines stockpiles

The Estonian Stockpiling Agency, based on the former state-owned Estonian Liquid Fuel Stocks Agency, is also in charge of Estonia's food and medicines stockpiles.

"ESPA's mission is to organize Estonia's supply security in a smart way, working with partners. The aim is to make sure basic energy, food and healthcare needs are met in situations where market solutions do not work," Jaško explained.

Harvesting grain. Source: (Mirjam Nutov/ERR)

The agency's ambition is reflected in its tender for 74 mobile generators of varied outputs to be used in crisis situations or to bring state stockpiles to residents.

"In addition to the goods, the agency must ensure resilience of stockpiling; in other words, make sure stockpiles are accessible in crises and market participants retain the ability to offer them."

ESPA involves experts and private contractors

Because the Estonian Stockpiling Agency employs fewer than 20 people, ESPA involves panels of experts for every type of stockpile.

"The ten-member panels are made up of top experts of market participants and state agencies, their input used to plan the best solutions for Estonia in terms of how to handle different stocks," Jaško said, adding that ESPA follows the Finnish Huoltovarmuuskeskus model.

Stockpiles are divided into procured reserves and delegated reserves. The first sees Estonia buy the reserves, with ESPA in charge of storing and updating them. Examples of procured reserves are motor fuels and natural gas.

In the case of delegated reserves, ESPA enters into contracts with market participants, based on tender results, while Estonia does not purchase the reserves outright, with contractors in charge of storing and updating stockpiles. In the case of delegated reserves – pharmacy medicines or grains – ESPA retains pre-emptive rights and partners are not allowed to sell a part of goods to someone else.

Supply security can be ensured through production capacity

Jaško said that in addition to physical stockpiles, supply security can be ensured through domestic production capacity and improving its resilience by keeping more raw materials or other critical components in warehouses.

"Ensuring production capacity is one of the most effective ways of solving supply security in the long run. Boosting resilience in food manufacturing in order to replace or complement food stockpiles is an untapped resource today. The agency is pursuing good cooperation with partners, and we are constantly looking for areas where it would be sensible and possible to take this approach," the spokesperson said.

Medical stockpiles include 40 million protective devices

Healthcare stockpiles include a month's worth of personal protective devices for hospitals, ambulances and social welfare institutions.

The stocks were procured by the Ministry of Finance when the coronavirus crisis began and handed over to ESPA in the fall of 2021.

"We have over 40 million units of personal protective devices, such as masks, respirators, gowns, suits, goggles and disposable gloves," Jaško said, describing relevant stockpiles as plentiful and enough for years in some areas.

Medicines stockpile to include 165 items

Last year, ESPA started putting together Estonia's pharmaceuticals stockpile, which will include 165 common over-the-counter and prescription drugs by this fall.

The first tenders saw bids for 104 drugs. ESPA declared the second tender to complete the stockpile last Friday.

Medicines. Source: Priit Mürk/ERR

The agency will enter into delegated stocks contracts with wholesalers, creating for the latter the obligation to maintain additional stocks of these medicines, as well as update them regularly. ESPA will compensate the agencies for the cost of maintaining extra stockpiles, but will not be buying the medicines outright.

Martin Jaško said that in addition to the strategic stockpile, wholesalers maintain a month's commercial reserve of more common medicines.

ESPA also plans to create a stockpile of crucial medical equipment and peripherals this year.

More detailed info on stockpiles not available

The Public Information Act prohibits publishing detailed lists of the state's operational stockpiles, their locations or terms of use.

"States take different approaches to discussing their reserves, while there is usually a measure of secrecy so as not to make life easier for potential enemies," Jaško remarked, adding that in Estonia, strategic stockpiles are generally regulated in the Emergency Act, with different pieces of legislation dealing with particular stockpiles.

Estonia's strategic reserves can only be used based on a separate government decision or with ministerial authorization in urgent need.


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Editor: Mait Ots, Marcus Turovski

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