The agency's insufficient budget significantly hinders maintaining optimal levels of goods and reserves, he says
The State Reserve of Bulgaria has sufficient quantities of fuel and the system is resilient in possible international crises. The main challenge remains limited budget financing and maintaining optimal levels of reserves. And what else… The Chairman of the State Reserve, Assen Asenov, spoke to FACTI.
- Mr. Asenov, you say that Bulgaria has sufficient quantities of fuel – How sustainable is the system in the event of a prolonged international crisis, such as the one surrounding the Strait of Hormuz?
- The reserves created by the agency and kept under the Oil and Petroleum Products Reserves Act are sufficient to meet the needs of the population and industry for a period of 90 days with zero production and imports. Stability for a significant period of time is also guaranteed by the fact that producers and importers have certain operational reserves of fuels. Any crisis of a longer nature also implies sufficient time to adapt and search for alternative solutions, according to the specific situation. In this regard, I believe that the system provides the necessary sustainability.
- Bulgaria reports about 85 days of security against a requirement of 90. What specific measures are being taken to cover this shortage?
- In this regard, our efforts are mainly directed in two directions. On the one hand, seeking the opportunity to secure additional financial resources from the budget in order to replenish stocks, and on the other, actions to facilitate companies in creating and maintaining stocks both in our country and in other EU member states, as provided by law. These actions are expressed in reducing the administrative burden, proactively informing obligated persons about their obligations and the opportunities that the law provides, fast and user-friendly service, contacts with similar structures and operators in other countries in order to assist and facilitate companies.
- Part of the reserves are stored in other EU countries. Doesn't this pose a risk in the event of a sudden crisis and difficult logistics?
- All stocks created by the agency are stored only and exclusively on the territory of the country. According to the law, obligated persons have the right to store up to 50% of their assigned quantities abroad. According to the European Directive, all Member States must take all necessary measures to prevent the emergence of obstacles and difficulties that could hinder the provision of fuels. As I have already mentioned, the agency maintains constant contact with our analogous structures abroad and we have their assurances that they will fulfill this obligation if necessary.
- Are fuels currently being taken from the State Reserve to compensate for the price of the column?
- According to the European Directive and the law, the reason for the release of stocks cannot be a crisis situation resulting from a change in the prices of crude oil and petroleum products. Additionally, the law explicitly states that the release takes place on a market basis, at market prices. All this clearly indicates that the release of fuel from the State Reserve in order to compensate for the price of a column is inapplicable according to the current legislation.
- You indicated that, if necessary, the stocks can reach the market in 5 to 15 days. Is this a sufficiently fast reaction in the event of a sharp fuel shortage?
- First of all, a sharp fuel shortage is not expected. The agency monitors the supply of oil and fuel in the country on a monthly basis, comparing the data with those for the same month in the previous year. If a decline is reported in two consecutive months, the measures provided for in the law are taken, including the release of fuel. On the other hand, the period from 5 to 15 days is completely acceptable for us, since all gas stations have operational quantities and there should be no shortage.
- What is the control over private companies that maintain 60% of the mandatory reserves, and is there a risk of non-fulfillment of their commitments?
- Control is one of our main obligations and our priority. No matter how dry the figures are, in this case they are indicative – for the last calendar year we have carried out 1470 inspections of economic operators under the Law on Oil and Petroleum Products Reserves. No deficiencies were found and this is indicative of the readiness of the companies to fulfill their obligations under the law.
- The state reserve is increasingly intervening in crises – from floods to droughts. Should its role be expanded beyond the classic strategic reserves?
- The nomenclatures maintained by the agency are quite broad. Starting with fuels, we move on to grain, medicines, food, water, medical supplies and end up with industrial goods. The goal is to ensure the country's ability to adequately respond to crises of any nature. Of course, the accumulation of such diverse types of goods implies the need for significant financial resources. Therefore, our efforts are focused on maintaining the available materials in the required quality and readiness for immediate use.
- In recent years, you have been talking about more transparency in the institution's work. How specifically is public control over the reserves guaranteed?
- The nomenclature lists and the regulations for them under the ZDRVVZ are classified information, which does not allow all of our activities to be public. In order to ensure maximum compliance with all laws and regulations, the overall activity of the agency is controlled by the Council for State Reserves and Wartime Stocks, composed of the Deputy Ministers of Defense, Interior, Economy, Health, Agriculture and Food and the Deputy Chairman of SANS. All purchases are made through the Public Procurement Act, and all sales - on commodity exchanges, where anyone can participate and, accordingly, achieve the best price for the agency. As for the information under the Public Procurement Act, the agency reports the maintained levels to the EC on a monthly basis, publishing this information on its website.
- What are the biggest risks facing the State Reserve at the moment - geopolitical, economic or internal organizational?
- The risks are mainly economic. The insufficient budget of the agency significantly hinders the maintenance of optimal levels of goods and stocks. It is also worth noting that the pay is not among the highest in the administration, which makes the job less attractive, and maintaining such a wide range of products requires people with great expertise in various fields.