Translated using ChatGPT service.
Ministry of Economics Develops Procedure for Establishing Oil Product Security Reserves
The Ministry of Economics (ME) has developed a procedure for creating oil product security reserves, including those required for aviation.
The new Cabinet of Ministers (CM) regulation draft titled “Procedure for the Creation and Maintenance of the State Oil Product Security Reserves” was approved by the government on Tuesday, May 27. Its development was mandated by the Energy Law, which stipulates that starting from June 1 this year, Latvia’s state oil product security reserves will be formed in a differentiated manner—comprising reserves maintained by the aviation sector and those maintained by the state through the company SIA “Publisko aktīvu pārvaldītājs Possessor”.
The requirement to establish oil product security reserves is set by the European Union directive, but the method of implementation is within each member state's competence. To enhance Latvia’s national economy and energy security, and to develop a more cost-effective long-term model for state oil product security reserves, the Saeima decided in December 2023 to gradually purchase security reserves into state ownership from 2024 until December 31, 2028, buying at least 15% of the required reserve volume each year.
“Publisko aktīvu pārvaldītājs Possessor” forms reserves sufficient for a minimum of 90 days. Fuel traders pay a service fee for the creation and maintenance of the reserves, which in 2025 will amount to €91.26 per ton of oil products sold or consumed in the Republic of Latvia. The fee is credited to the Accumulation Fund, whose resources are used to cover the acquisition, maintenance, and administrative costs of the security reserves.
Aviation sector companies do not pay this service fee; instead, they create their own security reserves for at least a 90-day period by purchasing oil products outright or acquiring oil product security reserve services.
Currently, 20% of the total state oil product security reserves volume is owned by the state, and this amount will increase in 2025.
The new regulations replace the currently effective CM regulations No. 29 of January 9, 2024, “Regulations on the Volume of Oil Products Owned by the State, the Amount of Service Fees, and the Procedure for Their Calculation, Payment, and Administration”, supplementing the existing rules with provisions that define aviation sector responsibilities related to reserve creation, volume determination, supervision, and other requirements.
Ministry of Economics
Public Relations Department
Email: prese@em.gov.lv