- Hans Weber
- October 3, 2022
Hungary, Slovakia, Czech Republic and Bulgaria still resisting EU ban on Russian oil
Talks aiming at agreeing an EU-wide ban on Russian oil imports have gone into a sixth day.
Hungary, Slovakia, the Czech Republic and Bulgaria are resisting approval and demanding special dispensations to accommodate domestic needs.
The main point of contention remains the ambitious timeline envisioned by the European Commission: a phase-out of all Russian crude in six months and all refined oil products by the end of the year.
Due to their entrenched dependency on Russian oil, the four countries argue they cannot make the switch to other providers in such a short period of time, without imperilling their national economies.
“There is still no proposal we could accept, and Hungary’s stance has remained unchanged,” Hungarian State Secretary Zoltán Kovács said in a short statement to Euronews.
The country’s prime minister, Viktor Orbán, had previously compared Brussels’s proposal to an economic “atomic bomb” because it ignored Hungary’s “circumstances”.
An initial compromise reached last week showed that Hungary and Slovakia could be allowed to complete the phase-out by the end of 2024, two years later than what Brussels had proposed, diplomatic sources with knowledge of the situation told Euronews.
Slovakia, which is a 100% dependent on Russian oil, argues its only refinery, Slovnaft, can work exclusively with a heavy type of Russian oil. Repurposing the technology to a lighter crude will require between four to six years and €250 million in investment, the government estimates.
A Slovak spokesperson told Euronews the country is willing to accelerate this timeframe and is pushing for a three-year exemption. Introducing an embargo on Russian oil by the end of the year would trigger a “compete recession,” the official stressed.
For its part, the Czech Republic is negotiating an extension until June 2024, the date by which the government expects to be connected to the Transalpine Pipeline. The country’s prime minister, Petr Fiala, travelled last week to Berlin and met with German Chancellor Olaf Scholz to discuss, among other issues, energy security.
The concerns from Hungary, Slovakia and the Czech Republic stem mainly from the fact they are all linked to the Druzhba pipeline, a massive Russian-operated conduit that they describe as “Soviet heritage.”
Their local refineries have for decades based their production lines on the regular and specific oil supplies provided by Druzhba, without making enough efforts to diversity their supply chains.
Bulgaria has now emerged as the fourth country demanding a dispensation in exchange for its green light.
“Gazprom has halted gas exports to Poland and Bulgaria over the countries’ refusal to pay for supplies in roubles,” a spokesperson from Bulgaria’s Permanent Representation to the EU told Euronews.
“In this context, we want an exemption from the embargo proposed by the European Commission on oil imports from Russia in the same conditions like Hungary and Slovakia.”
Unlike Hungary, Slovakia and the Czech Republic, which are all landlocked, Bulgaria has access to the Black Sea, opening up an easier route for alternative suppliers to bring in crude barrels to fill the gap left by Russia.
But the spokesperson said the Burgas refinery, which is owned by Russian energy multinational LUKOIL, would not be able to operate “entirely” without Russian oil.
“The refinery is the largest employer in the region, and shutting down refineries would cause serious social problems in Bulgaria’s fourth-largest city and rising fuel prices additionally,” the official added.
Negotiations between EU ambassadors kicked off on Wednesday, after Commission President Ursula von der Leyen unveiled the measure before the European Parliament, and intensified throughout the week as officials tried to fine-tune the proposal and win over the sceptical countries.
EU sanctions require the unanimous approval of all 27 member states.
The Commission and the French presidency of the EU Council insist all 27 are “united” in the need to adopt the latest package of sanctions and that “important progress” has been achieved over the last days.
“We need to finalise this package asap,” said a diplomatic source, speaking on condition of anonymity, noting discussion are now focused on “solidarity” solutions for those countries most affected by the embargo.
An official from a hardliner country told Euronews the exemptions are not a “good idea,” pose a “threat to competition rules” and should be accompanied by extra taxes and a prohibition to sell Russian oil to other countries.
The impasse comes a day after the Group of Seven (G7) committed to phase out their dependency on Russian energy, including on oil, and further cripple the Kremlin’s ability to finance the invasion of Ukraine.
“We will ensure that we do so in a timely and orderly fashion, and in ways that provide time for the world to secure alternative supplies,” the leaders said in a joint statement on Sunday. “We will work together and with our partners to ensure stable and sustainable global energy supplies and affordable prices for consumers.”
The embargo on Russian oil is considered the most radical and consequential step taken by the EU in response to the Ukraine war.
Since the onset of the conflict on 24 February, the 27 member states have spent about €24 billion on Russian oil, according to a tracking tool set up by the Centre for Research on Energy and Clean Air (CREA), an independent research organisation.
This article has been updated to include new developments and reactions.