9. OIL AND BIOFUELS

emergency stocks, but it may take up to 15 days for it to do so. However, the government is certain that in reality this would not be an issue.

In a major crisis, the framework of “crisis laws” provides the administration with powerful tools, such as fuel rationing, expropriation of stocks and limiting consumption. In 2012, a new act and the Ordinance on Emergency Stockholding of Oil were adopted to implement the EU Oil Stocks Directive 2009/119. This legislation, however, changed the Swedish system only a little. The 2012 law and ordinance brought improved control mechanisms and called for a contingency plan that should contain organisational measures, propose a plan for training and exercises and set rules for the implementation of demand-side measures.

Emergency stocks

During the Cold War, Sweden held substantial amounts of government-owned stocks in its own defence depots. These stocks and depots were sold and decommissioned in the 1990s and Sweden’s present-day obligation towards the IEA and the European Union is maintained via a purely industry-based system.

All importers and retailers are obliged to hold stocks if they import at least 2 500 cubic metres (m3) of crude oil or products or if they re-sell at least 50 000 m3. The obligation is issued for four products: petrol (gasoline), diesel, jet-1A and fuel oil. A refiner is allowed to hold up to two-thirds of its stock in crude, depending on the yield rates of its facilities. The emergency stocks are commingled with commercial stocks. The emergency stocks are financed entirely by the industry and costs are passed to the end consumer through pump prices at service stations.

The SEA calculates the total volume of stocks Sweden needs to hold and then allocates this volume on the importers and retailers based on the most recent statistics of their imported/sold volumes, i.e. all companies must hold the same percentage of their previous year’s imported/sold volumes as stocks.

As of end of April 2018, the emergency stocks amounted to 42.3 mb, equalling 187 days of net imports, according to IEA methodology. All the stocks are held by industry, with 40% in the form of crude oil and 60% in the form of products.

Industry held 3.3 mb of emergency stocks abroad, primarily in the Netherlands (1 mb), Latvia (1 mb) and the United Kingdom (0.8 mb). An additional 2.9 mb of stocks were being held in Sweden on behalf of other countries – the main user being the United Kingdom with 1.5 mb of stocks. All bilateral stocks, both abroad and in Sweden on behalf of other countries, are reported as ticketed stocks. Companies are allowed to hold a maximum of 30% of their obligation abroad.

Compliance and monitoring

Sweden is consistently compliant with the IEA’s minimum obligation. Any company that fails to maintain the compulsory stocks must pay the state a special storage penalty charge. This penalty charge corresponds to the estimated capital cost of the product for one month, plus a surcharge from 200% up to 1 000% for failing to meet the requirement and if it fails to correct the shortage.

The SEA is responsible for monitoring companies’ compliance. It is currently working towards a programme of regular controls. However, capacity constraints prevent a proper auditing of all the actors, especially periodically and at location.

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