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Lithuania says EC gas price cap Serbia announces temporary ratings are volatile due to tight refining
“However,” added the rating firm, “the
proposal is “no solution for this ban on natural gas exports margins and the company’s focus on fuels
production with limited business integration.
winter” Serbia’s government decided on October 17 Similar to other Turkish corporates, Tupras
to introduce a temporary ban on exports of
relies on uninterrupted access to local bank
The European Commission’s current proposal natural gas until the end of the month. funding to support its liquidity.”
on how to regulate high energy prices does A government statement said the ban was Tupras’s diesel crack spread was $35 a
not solve the problem at the moment and introduced to ensure supply to the domestic barrel in 9M22, up from $6/barrel in 9M21,
must be improved, says Lithuanian Deputy market and prevent possible damage to the said Fitch. It added: “The jet fuel crack
Foreign Minister Jovita Neliupsiene, LRT.lt, economy and citizens. spread rose to USD32/bbl from USD3/bbl,
the website of Lithuanian national broadcaster “The decision was made in order to while the gasoline crack spread was USD22/
LRT, reported on October 19. prevent the threat of a critical shortage bbl (USD11/bbl). Fitch believes that the
Her comment came in response to the of natural gas caused by a disruption in diesel and jet fuel crack spreads are likely to
EC’s proposal on joint gas purchases and the the global energy market,” a government remain elevated on lower export of products
application of price cap mechanisms, but only statement said. to Europe from Russia, which is to further
for transactions on the Dutch TTF energy Serbia signed a long-term gas import deal decrease from February 2023 once EU
exchange and not for all gas purchases as with Russia’s Gazprom this spring but this sanctions on Russian fuel export come into
Lithuania and some other EU member states is not enough for all the country’s domestic effect. “Higher refinery capacity utilisation
propose. needs so it is also looking for other suppliers. and lower demand due to weaker GDP
“The Commission’s existing proposal growth may be negative for gasoline and
should be improved. We need at least very overall refining margins in the near term.”
clear conditions on when the Commission Fitch revises outlook on Turkish Fitch also noted: “Despite record high
will come up with such a gas price cap inflation and weak Turkish lira increasing
proposal,” the vice minister told BNS, a Baltic refiner Tupras to stable from pump prices, Turkish gasoline demand
newswire, on October 18 after discussing the increased 17% yoy in 1H22. Jet fuel was up
idea with her EU counterparts at the General negative 48% and there was a fairly small 6% drop in
Affairs Council in Luxembourg. sales of gasoline. The growing market is a key
“Long-term measures are important, but Fitch Ratings said on October 14 that it has support for Tupras credit profile.”
this winter will come before we have long- revised its Outlook on largest Turkish refiner
term measures in place, which is why the Turkiye Petrol Rafinerileri’s (Tupras’) Long-
Commission needs to present a legal proposal Term Foreign- and Local-Currency Issuer Croatia’s INA picks KPMG for
for a price cap soon,” Neliupsiene added. Default Ratings (IDR) to Stable from Negative
There’s still no consensus among EU and affirmed the IDRs at ‘B’. external audit of gas trading
member states on a gas price cap, which Fitch said: “The Outlook revision follows
is why the Commission is waiting for the stronger credit profile of Tupras and the operations
outcome of this week’s European Council progress made in increasing export sales and
meeting, she said. cash holdings abroad. Tupras had reached a Croatian oil and gas company INA said on
“The Commission will wait for the net cash position as of end-June 2022. October 17 it has selected KPMG to carry
outcome of the European Council meeting “Export sales accounts for 15% to out an external audit in order to improve its
because member states will demand a stronger 20% of its total sales and the UK trading gas trading business, after a major scandal
opinion after seeing the existing EC proposal, subsidiary’s cash holdings are increasing. The involving a gas scam scheme was revealed by
because, at least in Lithuania’s opinion, it company’s record of implementation of these the country’s anti-corruption body, USKOK.
does not solve the problem,” Neliupsiene financial and structural enhancements and In August, USKOK, arrested five people
underlined. conservative financial policy would support suspected of reselling natural gas that
“We are not interested in decisions, for rating its Long-term Foreign-Currency belonged to INA, causing damages worth
example, on the use of EU money because IDR above Turkiye’s Country Ceiling of HRK800mn (€113mn).
we are among the countries that are doing ‘B’. Currently, Tupras’s Long-Term Local- KPMG will consult INA’s new management
it successfully. We don’t see from the EC Currency IDR of ‘B’ drives its Long-Term on how to improve gas trading operations and
proposal, as it stands, that it will solve the Foreign-Currency IDR.” which corrective or preventive actions should
current problem of high gas prices,” she The rating of Borsa Istanbul-listed Tupras, be taken. It will also review INA’s gas trading
added. said Fitch, was supported by the company’s portfolio since 2020.
The EC says the proposals are aimed at leadership in the Turkish refined product The audit should be completed by mid-
tackling the problem of high gas prices in the market, the operation of some of the most November when KPMG is expected to submit
EU and ensuring reliable supplies this winter. complex set of refineries in EMEA, and its its findings to INA’s management board.
ability to access and process cheaper, heavier
and sour crudes from several suppliers.

Week 42 20•October•2022 www. NEWSBASE .com P17