Councils in Estonia's most easterly region are preparing for hard times and cutting their budgets. They believe a quick start to the new shale oil processing plant and raising extraction fees will help offset their losses.

Narva-Jõesuu will have to write off at least €300,000 in lost revenue this year, as the Auvere power plant, located on the city's territory, is still not operating at full capacity.

The council was also expecting approximately €1 million from the new processing plant, but this has been delayed.

"The oil shale sector has a very serious impact on the budget of the city of Narva-Jõesuu. As of today, there is no equivalent replacement. The oil processing plant, when it starts to operate at full capacity, will first of all bring us up to €1 million a year, but in addition, it will also bring the state up to €50 million in net profit a year. And everyone talks about a fair transition, but it is certainly not an equivalent replacement as it stands today," said city mayor Maksim Iljin.

Alutagus Council approved its additional budget today (October 26). This year, an optimistic forecast for shale oil mining did not turn into reality and the council will forgo €600,000 in fees. In the coming year, this will rise to €1.5 million.

"Mining volumes have decreased. We knew until now that [mining] volumes would not be reduced, as we were assured by the leaders of Eesti Energia here at the beginning of the year, and now next year's forecasts, which were eight million tonnes per year at the Estonia mine, have been reduced twice," said Alutaguse mayor Tauno Võhmar.

The municipality is also faced with the choice of what to cut.

"We'll have to, I don't know, mow less [grass] and shovel less snow, cut staff. The first thing is no investment. We have had the capacity to invest €3 or €4 million a year up to now, and then there will be zero investment in the future," said Võhmar.

The mayor said the easiest solution would be to raise the remaining fees. Then the municipality would not ask the state for help in difficult times.

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