Defence Policy

Schwedt as the Mažeikiai? Will the Russian Fuel flood Poland?

  • Satelita GOES-16. Ilustracja: Lockheed Martin
    Satelita GOES-16. Ilustracja: Lockheed Martin

Overtaking of the Schwedt refinery by Rosneft, carried out in cooperation with the Kremlin authorities, may be dangerous for the Polish fuel companies. Here we mean the process of production of fuels, involving the Russian crude oil which would be delivered at dumped prices. Furthermore, we should also consider the subsequent sales of these fuels within the territory of Poland.

The threat for transit of crude oil through Poland, which may emerge due to the fact that the German Schwedt refinery is to be overtaken by Rosneft. has already been mentioned by me. I stated that reorientation of the delivery of the resources to the plant via the land-based facilities (Druzhba pipeline), towards the maritime-based transport measures would be controversial for the Russians within the scope of finances, since it would require expansive funding and a favourable attitude of the German government (regarding construction of a pipeline that would connect Schwedt and Rostock and additional expansion of the Rostock port). The issue related to the export routes is not a sufficient clarification of the threats that emerge from the changed ownership structure in the German petrochemical plant located close to the Polish border.

The aspect pertaining the operations of the refinery overtaken by the Russians within the context of it being a business competition for the Polish petroleum sector seems to be equally important. Here, I am referring to the threat of delivery of crude oil (at dumped prices) to the Schwedt plant, and further distribution of the produced fuels within the Polish territory, at very low prices. Such scenario is quite similar to the main narrative that is justifying the purchase of the Lithuanian Mažeikiai plant, executed by the Polish PKN Orlen company. Is this scenario plausible?

Surely, such option must be taken into account, since a similar pattern was to be utilized in case of the Russian Akron company, which was to expand through acquisition of a production plant within the territory of the EU (Tarnów). This plant would be a final destination for shipping of the extremely cheap natural gas and it would manufacture attractive products, going through the gap of non-existent anti-dumping customs-fees covering the Russian fertilisers (which – the fees – are calculated on the basis of the gas prices delivered for the Russian and European companies). Thus, we may say that the strategy is not new, it may be easily utilized by Rosneft. As it happened in case of the chemical sector, the Poles could utilize a relevant defensive mechanism. Suspected dumping may be reported to the European commission.

There is one more open question however – how long would it take to consider the submitted complaint? Poland, for some time now, has been trying to force the Germans to modify the legal regulations that limit the competition capabilities within the scope of the minimum wage for the truck drivers. We may assume that the issue related to the Schwedt plant could be solved in a similar way – even though the facility is going to be controlled by the Russians soon, it is still located in Germany, and it pays taxes to the German Tax Office. It may be expected that Rosnieft will receive some silent approval from the Berlin authorities...