High fuel prices delay Estonia's reserve replenishment
Estonia sold off about a tenth of its fuel reserves in March but is not yet buying them back due to high prices, though officials say overall reserves remain solid.
Estonia's Stockpiling Agency released roughly ten percent of its fuel reserves onto the market in March — mostly gasoline, along with smaller amounts of diesel and aviation fuel. There are currently no plans to repurchase that fuel, since prices remain high and buying now could push them even higher.
The agency's task is to guarantee adequate supplies of gasoline, diesel, natural gas, and aviation fuel. Because a large share of global oil flows through the Persian Gulf, the International Energy Agency and its member states, including Estonia, agreed in spring to release part of their reserves.
Reserves remain solid
Ando Leppiman, head of the Stockpiling Agency, said Estonia's fuel reserves are currently in good shape and fairly large in volume. The agency maintains state-owned operational reserves and also tracks stock levels held by companies and importers. As of the end of August, gasoline and diesel supplies were sufficient for nearly 120 days.
Leppiman said the fuel released in March has not yet been repurchased, and reserves will only be replenished once prices decline. It is hard to predict when that will happen, as the Middle East crisis remains unresolved. Leppiman is currently attending the annual meeting of fuel-reserve agencies in Croatia, where discussions have highlighted limited diesel availability as the biggest issue, pushing diesel prices to record levels.
Small commercial stocks
Beyond state reserves, Estonian fuel companies hold their own commercial stocks. Alan Vaht, a board member at fuel company Terminal, explained that retail fuel inventories typically cover just one to seven days of consumption — the only reserve retail chains actually have, contrary to the misconception that large hidden stockpiles exist in fuel terminals.
No fuel shortage is expected at Estonian filling stations. Retailers keep small reserves because no one wants to store fuel at today's high prices, since prices may fall in coming months, forcing any stored fuel to be sold at a loss.
