Slovnaft, a subsidiary of the Hungarian group MOL, is requesting a one-year extension on its exemption from EU sanctions that allow it to export refined products from Russian oil to the Czech Republic. The current exemption is set to expire in the first half of December this year. Czech Republic is one of Slovnaft’s main export markets.
According to Szijjártó, MOL needs another year to complete its investments in its Slovak refinery, Slovnaft. These investments will enable the refinery to process different types of oil, not just the Russian Urals blend. Therefore, MOL is urging the EU to extend the exemption for another year.
MOL currently relies on Russian oil supplied through the southern branch of the Druzhba pipeline for its refineries in Slovakia and Hungary. However, Slovakia plans to reduce its dependence on Russian oil this year.
Zsolt Hernádi, the CEO of MOL, stated in April that the company plans to partially finance the investments in changing the oil processing technology in its Dunaj and Slovnaft refineries with EU funds. The investments are estimated to range between $500 million and $700 million.
Last year, only about 5% of Slovnaft’s oil supply came from sources other than Russia. However, by the end of this year, the company aims to increase this share to 30-35%, which would amount to approximately two million tons.
Slovnaft significantly improved its financial performance last year, with its pre-tax profit more than tripling to €1.04 billion ($1.23 billion) from €303 million ($358 million) in the previous year. However, the net profit increase was lower due to the impact of the special tax, rising by 64% to nearly €415 million ($490 million). Slovnaft noted that Russian oil was sold at a higher discount compared to the Brent crude benchmark.
The special tax had a significant impact on Slovnaft, amounting to over €410 million ($484 million). The Slovak parliament extended the validity of the special tax on excessive profits for selected companies for this year and increased its rate to 70
What is the rationale behind MOL’s request for a one-year extension on its exemption from EU sanctions for exporting refined products from Russian oil to the Czech Republic?
Slovnaft, a subsidiary of Hungarian group MOL, is seeking a one-year extension on its exemption from EU sanctions that allow it to export refined products from Russian oil to the Czech Republic. The current exemption is due to expire in the first half of December this year. The Czech Republic is a key export market for Slovnaft.
MOL argues that it needs another year to complete its investments in its Slovak refinery, Slovnaft, which will enable the facility to process various types of oil, not just the Russian Urals blend. The company is therefore urging the EU to extend the exemption for another year.
Currently, MOL relies on Russian oil supplied through the southern branch of the Druzhba pipeline for its refineries in Slovakia and Hungary. However, Slovakia plans to decrease its reliance on Russian oil this year.
MOL CEO Zsolt Hernádi stated in April that the company plans to partially finance the investments in oil processing technology changes at its Dunaj and Slovnaft refineries with EU funds. The estimated investments range from $500 million to $700 million.
Last year, only around 5% of Slovnaft’s oil supply came from non-Russian sources. However, the company aims to increase this share to 30-35% by the end of this year, which is approximately two million tons.
Slovnaft saw a significant improvement in its financial performance last year, with pre-tax profit more than tripling to €1.04 billion ($1.23 billion) from €303 million ($358 million) the previous year. However, due to the impact of a special tax, the net profit increase was smaller, rising by 64% to nearly €415 million ($490 million). Slovnaft highlighted that Russian oil was sold at a higher discount compared to the Brent crude benchmark.
The special tax had a major impact on Slovnaft, amounting to over €410 million ($484 million). The Slovak parliament extended the validity of the special tax on excessive profits for selected companies for this year and increased its rate to 70%.
“Extending EU sanctions on MOL and Slovnaft’s investments in the Slovak refinery is a necessary step to ensure fair competition in the European energy market. By addressing concerns over these companies’ dominance, the EU can promote a more balanced and transparent playing field for all stakeholders involved.”
The request for EU sanctions extension on MOL and Slovnaft’s investments in the Slovak refinery is a necessary step to ensure fair competition and transparency in the market. Sanctions can effectively deter monopolistic practices and protect the interests of all stakeholders involved.