GERMAN REFINERIES FACE INDIAN DIESEL CRISIS

German authorities are worried and ready to consider any option to save the factories.

German oil refineries are going through hard times. Handelsblatt magazine writes that their economic situation has become the most difficult in history. One of the main reasons for the impending recycling crisis in Germany is that the factories cannot cope with competition.

The EU has banned Russian oil imports from December 2022 and now India, buying cheap Russian raw materials, has become a major supplier of diesel to Europe.

In addition, recycling is under pressure from environmental costs. Companies are postponing investments in development as demand for oil products in Europe is unpredictable due to the drive to zero emissions.

Particularly affected is the PCK plant in Schwedt, which currently belongs to Russia's Rosneft, but has been temporarily transferred to the management of the German Federal Network Agency (German energy regulator, BNetzA). Previously, the Schwedt refinery used Russian oil, but after the EU embargo it no longer received it via the Druzhba pipeline (although for a time there was an exception for the northern branch of the pipeline). Currently, the refinery receives oil from the Kazakh company KEBCO via the Druzhba pipeline, the characteristics of which are similar to Russian Ural oil.

Recently, the German authorities again extended the temporary management period of refineries with Russian shares, giving Rosneft time to find a buyer for its shares in German refineries, Handelsblatt writes.

Overall, the situation in Germany is such that some refineries may close. The owners already want to sell the refinery, but there are no buyers.

If part of the oil refining capacity were to close, Germany would face disruptions in the supply of diesel, gasoline, kerosene, fuel oil and other important products.

The country's authorities are worried and are ready to explore any option to save the factories. There is no clear solution yet, but the situation is critical, the publication confirms.