The information was translated using the ChatGPT service.
With the aim of increasing Latvia's economic and energy security and creating a long-term, cost-effective model for the establishment of state oil security reserves, the Cabinet of Ministers decided on October 9th of this year to gradually begin acquiring oil product reserves in state ownership from the next year onwards. This means that these reserves will also be stored exclusively within the territory of Latvia. It is expected that by introducing the new model for the management of state oil security reserves, savings of over 500 million EUR could be achieved over 10 years, resulting in a lower fee being charged to fuel retail customers.
State oil product security reserves are intended for both energy and crisis management within the framework of national security because they essentially ensure the availability of oil products to various user groups when there is a significant disruption in daily circulation (such as insurmountable supply chain disruptions and market traders unable to import new volumes). Since January 1, 2020, the functions of central stockpile maintenance structures have been performed by the State Construction Control Bureau, conducting public procurement for the opportunity to purchase oil product stocks from both Latvian and foreign traders. A state fee is applied to industry traders for such security reserve services to fully cover the maintenance expenses.
The introduction of the new management model will be financed by a public service fee paid by the same traders who have paid the state fee up to this point. The service fee will be deposited in an accumulation fund that will be outside the state budget. The funds accumulated in the accumulation fund will be used to cover the acquisition, maintenance, and administrative expenses of security reserves.