The agency emergency oil stock management model is intricate and poorly controlled
Bratislava, January 29, 2021 - The Supreme Audit Office of the Slovak Republic (SAO SR) considers the administration of emergency stocks of crude oil and petroleum products to be confusing and risky. The reason is the complex contractual and property relations between State-owned companies and private suppliers in the so-called agency model. These stocks are managed by the Agency for Emergency Stocks of Petroleum and Petroleum Products, which in 2013 took over part of the duties of the State Material Reserves Administration (SMRA). However, the transformation has not contributed to the planned improvement in public finances; on the contrary, almost EUR 200 million in non-productive expenditure was incurred, which was subsequently felt by consumers in fuel prices. In addition, the State has limited direct decision-making power in the Agency. Despite its majority share, for example, only selected entrepreneurs can decide on the sale of part of the stock. The SAO SR also found that in 2017-2019 the SMRA did not sufficiently control the actual state and quality of oil and oil product stocks. At the same time, the Parliamentary Committee to which the SAO SR sends the report points out that Slovakia does not have emergency and contingency plans in the event of an oil emergency, nor strategic and conceptual documents for this area.
The full text of the press release about this issue in Slovak language is available here. Use the Google icon in the top bar for automatic translation.