Lukoil Secures Fuel Supplies Despite Oil Supply Issues

By the end of March, all needs for processing and refining oil from “Lukoil Neftohim Burgas” are secured, and a delivery schedule for April has been drawn up. This was stated by the special commercial manager of the company, Rumen Spetsov, during a hearing in Parliament regarding the state's readiness to ensure the necessary quantities of fuel for the needs of the population and industry in connection with the crisis caused by the blockade of the Strait of Hormuz, as well as the measures planned by the government to deal with the price shock caused by this crisis. 

According to Spetsov, there is currently no information from traders about a refusal to fulfill deliveries for April, although there is a delay. 

“Lukoil Neftohim Burgas” operates on market principles. After the appointment of the special manager, the umbrella of the so-called holding structure “Litasco” is gone, which means that there are four independent commercial companies on the territory of Bulgaria, each of which is now on its own expense, on its own budget, and strives on market principles to buy, sell, and guarantee its profit, the same applies to “Lukoil Neftohim Burgas”, Spetsov explained.

According to him, this complicates the situation in these force majeure circumstances at the moment. 

There are over 800 vessels blocked in the Strait of Hormuz, 300 of which are oil tankers, 300 are tankers with finished products, and the rest are for gas delivery, so there are very serious difficulties on a global scale, he further explained. 

According to him, even if oil is found at a good price, there is a risk that there will be no one to transport it, which is currently no less a threat than the price of the fuel itself. 

“Lukoil Neftohim Burgas” is a refinery created and designed to work with Russian “Urals” oil. After the imposition of sanctions (against Russia, ed. author), the inability to load this oil strongly limits the choice of different types of oil in order to compose such a mixture so that the “Neftohim” system can work properly and produce high-quality fuel. At the moment, it is necessary to mix approximately 6 types of oil in order to get close to the state of the system and to produce quality fuels. This means diversification of different sources, but the combination of these oils happens in a strictly defined order, so that when buying oil, it is a matter of such that can be processed by the refinery, Spetsov emphasized. 

According to him, the refinery pays a high price for this because the system wears out faster than planned and the time between two planned repairs is drastically reduced. 

Despite everything, the deliveries we have planned for March will arrive, high-quality fuel will be produced, and for April we will have to see how the military actions will develop and whether the contracts will be fulfilled, he summarized.  

According to him, the price of fuels at “Lukoil” gas stations is the lowest compared to other traders.