The European Commission has put on hold a request by Hungary and Slovakia to call on Kyiv to lift sanctions against Russian oil company Lukoil, The Financial Times reports.
After Moscow's full-scale invasion of Ukraine, Hungary and Slovakia were granted an exemption from the European ban on Russian oil imports. But Budapest and Bratislava said that Kyiv's recent decision to stop transit of Lukoil products from Russia through the Druzhba pipeline could reduce supplies.
The governments have asked the European Commission, which handles EU trade policy, to start consultations on a trade deal with Ukraine. But EU trade commissioner Valdis Dombrovskis told the Financial Times that Brussels would need more time to gather evidence and assess the legal situation.
At yesterday's meeting of trade officials of the euro bloc member states, 11 countries supported his position. Not a single country sided with Budapest and Bratislava, three diplomats told the FT. According to one of them, the trade agreement with Ukraine contains a security clause that could lead to a supply disruption.
The newspaper notes that the timing of Budapest's request is particularly ironic, given that Hungarian Prime Minister Viktor Orbán has deeply angered most of his EU partners and the European Commission in recent weeks by unilaterally lobbying for a "peace plan for Ukraine" during visits to Russia and China without Brussels' approval.
Kyiv insists that thanks to other Russian companies, the pipeline is flowing as much oil as before. Russian oil accounts for 35-40% of the raw materials of Slovakia's only refinery. The products made from this oil are also exported to Ukraine and the Czech Republic, with another exception granted until 5 December.
Slovak President Peter Pellegrini said that he would be "forced to react" if Ukraine does not change its position on Lukoil. He added that Slovakia is helping Ukraine with gas reserves and electricity supplies. Lukoil's supplies, which pass through Ukraine, account for about 25-30% of the country's oil imports.
- Hungarian Foreign Minister Péter Szijjártó earlier criticised Ukraine's decision to stop the transit of Russian Lukoil oil to his country.
- He said that Hungary would continue to block the €6.5bn programme to finance military aid to Ukraine under the European Peace Fund until Kyiv lifts sanctions against Russia's Lukoil and resumes oil transportation from Russia to Hungary.
- A few days ago, Politico wrote that Hungarians were facing a fuel crisis within a few weeks, with sky-high prices and electricity shortages.
- Russia's Lukoil came under Ukrainian sanctions back in 2018. However, these restrictions prohibited Russians from withdrawing capital from Ukraine, participating in the privatisation of property, or trading in it.
- In June this year, the National Security and Defence Council significantly expanded them. However, Naftogaz explained that the new restrictions did not stop oil transit. According to Naftogaz's CEO, "there is no Lukoil oil in transit, but the volumes are the same.”