Rising oil prices, geopolitical crises and announced blockades of transporters have reopened the issue of energy market stability and supply chain resilience. The key mechanism for responding to such situations in the Federation of Bosnia and Herzegovina is the mandatory reserves of oil and oil derivatives, managed by the Terminals of the Federation. Damir Kreso, the President of the Terminals of the Federation of Bosnia and Herzegovina, spoke about this topic in Dnevnik D.
“The Federation terminals were established by the Law on Petroleum Products in 2014 and their main role is to store reserves of oil and petroleum products for the needs of the Federation. When we say reserves, we mean quantities that are used exclusively in emergency situations – disruptions, wars, supply disruptions or natural disasters, when the supply chain is interrupted.”
He also emphasizes that this institution has no influence on fuel prices.
“The terminals have no role in determining prices. The market is regulated, there are clearly prescribed margins and supervision by the Federal Ministry of Trade and Inspection.”
How long can reserves last in the event of a crisis?
Speaking about current stocks, Kreso points out that the first serious capacities were established recently.
“At the end of last year, we formed serious reserves for the first time by putting the terminal in Blažuj into operation with a capacity of 42 million liters. A railway connection to Ploče was also established, which opened an important logistical route for the delivery of larger quantities of fuel.”
He also explains how these reserves are used in practice.
“In the event of a crisis, the Federation Government decides who will be allocated fuel and in what quantities. These are primarily hospitals, police, firefighters and other key services. We now have sufficient reserves for the functioning of these services and they can last for a longer period – we are talking about months, depending on consumption and the extent of the crisis.”
Why are accurate data on stocks not published?
When asked about transparency, Kreso emphasizes the security aspect.
“No country in the world publishes the exact quantities of its reserves. There is an obligation to have stocks for a certain period, 90 days of imports or 60 days of consumption, but specific figures are not made public for security reasons.”
Reserves are not for citizens, but for key services
He particularly emphasizes the difference between state reserves and commercial stocks.
“State reserves are not used to stabilize prices or for widespread consumption. They are intended exclusively for emergencies. Citizens depend on stocks held by private distributors.”
He adds that the new government decision is aimed at strengthening that segment.
“By renting storage capacities to private companies, we are increasing the total stocks in the country. In such cases, the government has the right of first refusal and can react quickly if additional fuel is needed for the system.”
Infrastructure as a key problem: without storage, there is no security
Speaking of capacity, Kreso emphasizes that infrastructure is the biggest challenge.
“Our only operational terminal is currently Blažuj. The terminal in Bihać is under reconstruction, we are expanding Živinice, and we are preparing Mostar for the next phase. When they are all completed, the total capacity would be around 220 thousand cubic meters.”
He emphasizes that BiH does not have a refinery, but that this is not the biggest problem.
“Perhaps a bigger challenge than a refinery is the lack of storage capacity. If we are already importing fuel, we must have somewhere to store and store it.”
Financing and controversies over spending money
Kreso rejects claims that funds are being spent on administration.
“Terminals are financed from one pfennig per liter of fuel, which amounts to about 9 to 9.5 million marks annually. This money goes to the construction of terminals, the purchase of reserves, maintenance and operation of the system. In the last two years, about 25 million have been invested in the Blažuj terminal, 24 million in Bihać, and more than 15 million in the purchase of oil and derivatives in the last 6 months. This clearly shows that the funds are going into development and reserves, and not into administration.”
BiH is far behind the region in terms of investments in reserves
Comparing with the region, he points out a significant lag.
“In Croatia, about 5 pfennigs are allocated per liter, in Serbia 4, in Montenegro 6, while in our country it is only one pfennig. This means that we are financially far behind and that we are building capacities more slowly. If we increased the allocation to three or four pfennigs, we could speed up the construction of terminals and increase reserves three to four times.”
He points out that fuel prices have not increased significantly, which is also shown by the fact that citizens of neighboring countries fill up in border towns in BiH.
Terminal Ploče – a key supply point
Speaking of regional connectivity, he particularly highlights Ploče.
“Around 80 percent of oil derivatives for Bosnia and Herzegovina enter through the terminal in Ploče. It is the most important infrastructure facility for supply. Without that terminal, fuel in the Federation would cost 5 KM.”
However, the problem of legal status remains unresolved.
“We are working on resolving property and legal issues with Croatia. It is a long process, but I expect that by the end of the year we will have a solution that will enable stable use of that terminal.”
Terminal Ploče – a key supply point
Speaking of regional connectivity, he singles out Ploče in particular.
“Around 80 percent of oil derivatives for Bosnia and Herzegovina enter through the terminal in Ploče. It is the most important infrastructure facility for supply. Without that terminal, fuel in the Federation would cost 5 KM.”
However, the problem of legal status remains unresolved.
“We are working on resolving property and legal issues with Croatia. It is a long process, but I expect that by the end of the year we will have a solution that will enable stable use of that terminal.”
The impact of global crises and prices on the formation of reserves
Speaking of current market disruptions, he emphasizes caution in procurement.
“The rise in oil prices has also affected us. We had planned deliveries, but we stopped them because it makes no sense to buy reserves at the highest prices. We are waiting for the market to stabilize, so we will continue with procurement.”
He adds that he expects the situation to calm down.
“Prices will return to normal, because this pressure on the energy sector is not sustainable.”
Possible blockades and the readiness of the system
Finally, he refers to the announced protests and possible supply disruptions.
“If there are border blockades, there will certainly be some supply disruptions. However, measures have already been taken – distributors are increasing stocks, railways are increasing transport, and terminals are ready for logistical support.”
He concludes that the system has a certain level of readiness, but also limitations.
“We are ready to a certain extent, but blockades can always cause unwanted disruptions. I hope that a solution will be found quickly so that citizens do not feel the consequences.”
