Energy, EU – Baltic States, Lithuania, Oil, Transport

It has reduced its production as the export of fuels is loss-making. The export of Lithuanian fuels is shrinking every month. For example, in January 2014 against January 2013, exports decreased by almost 50%. Fuel production in Mazeikiai began to fall in the second half of 2013.

ORLEN Lietuva says that the main obstacles are huge competition in global fuel markets, shale oil extraction in the United States and unfavourable logistics conditions. These were the reasons for reducing the volume of oil refining last year. Record losses of the company have attracted the attention of the Government as well. On Monday, Prime Minister Algirdas Butkevicius paid a visit to Mazeikiai.

Currently fuels of the company are transported to foreign markets via Klaipeda Seaport, yet they have to be transported additional 200 km from Mazeikiai to the port, and it increases the price of the production. In addition, the leadership of the company complains about high transport prices they are forced to pay to Lithuanian Railways company, for example, they pay more than their rivals in Belarus. The prime minister promised to reconsider railway tariffs. However, the talks on lower tariffs, which took place in early April between the Lithuanian Railways and ORLEN Lietuva, have been unsuccessful.