Poland: oil embargo despite dependence on Russia?

Status: 05/30/2022 04:59 am

Within the European Union, Poland is pushing for a quick oil embargo against Russia. The country itself is heavily dependent on Russian oil. How does that fit together?

By David Zajonz, ARD Studio Warsaw

For Poland, which sees itself as Ukraine’s closest ally, it is a particularly painful number: in March of this year alone, Poland transferred around 1.3 billion euros for oil and fuel supplies to Russia. The rising prices on the raw material markets bring huge additional income to Russia. A total of two thirds of Polish oil imports come from the country, which in Poland is often referred to only as the “aggressor”.

Poland has already taken smaller steps towards greater diversification in recent years. Just ten years ago, the Russian share of Polish oil imports was more than 95 percent. However, it would be difficult for Poland to completely do without Russian oil, says energy expert Konrad Świrski: “You can compare that to Germany’s dependence on Russian gas.” For him, however, there is no question that Poland will have to phase out Russian energy.

In view of the war against Ukraine, this is a “historical necessity,” says Świrski, who teaches at Warsaw University of Technology. “Even otherwise none of us would buy from a murderer.” The oil has to be bought on the world markets. Świrski advocates a coordinated approach by the EU, in which the member states do not compete with each other as far as possible.

Key role for Gdańsk Oil Port

Since oil is less complicated to transport than gas, switching to other suppliers is considered comparatively easier. So far, Saudi Arabia, Kazakhstan and Nigeria are the countries from which Poland – apart from Russia – gets most of its oil. The additional oil supplies will have to come to Poland primarily by sea.

The country is therefore placing great hopes in the “Naftoport”, the large oil port in Gdansk. “We are prepared for a European embargo on Russian oil,” says Naftoport operator PERN. The oil port can be further expanded if necessary. Germany could also benefit from this. Poland’s Energy Minister Anna Moskwa and Federal Economics Minister Robert Habeck agreed on a corresponding cooperation at the end of April.

Value-added tax on fuel reduced before the start of the war

Despite all the precautions, consumers in Poland will have to be prepared for the burden in the event of an embargo: “The price of oil will certainly rise and so will the prices at the gas stations. That will be a problem,” says energy expert Świrski. Similar to many motorists in Germany, the Polish population reacts sensitively to the development of fuel prices. As early as January, i.e. before the start of the war, the Polish government decided to reduce the VAT on fuel from 23 to eight percent.

Further increases in oil prices would probably also drive up the inflation rate in Poland. In April, at 12.4 percent, it was still well above inflation in Germany. Against all odds, Poland appears determined to exit Russian oil as soon as possible. At the EU level, Energy Minister Moskva is pushing for an oil embargo with a specific end date.

After all, Poland has already phased out Russian gas. Out of necessity – because Russia turned off the gas supply to Poland in April. However, the Polish gas storage facilities were well filled and LNG liquefied gas is entering the country. From autumn, gas from Norway is also to come to Poland via a pipeline through the Baltic Sea.

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