What would shutting down of Pancevo refinery mean for Serbian industry and economy? These are the details

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Jelica Putnikovic, the editor of the Energija Balkana portal, says that it is crucial for Serbia that the Pancevo refinery continues to operate and for the state to protect its long-term energy and economic interests.

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She told Tanjug that it follows from the statements made by state officials that there are guarantees that the Pancevo refinery will continue working, but she warned that Serbia must define the conditions precisely, if the Hungarian MOL is to become a co-owner of NIS.

"The key is that the refinery must work, that the issue of exploration and exploitation of oil and gas in Serbia is regulated, because NIS has the exclusive right to both the existing rigs and any new ones. No other company can come to Serbia and look for oil and gas, and we know that they come to look for some other resources. Petrochemical production must also survive, Petrohemija (company)," she said and stressed that this is the basis of the country's energy and industrial stability.

According to Putnikovic, the possible shutting down of the Pancevo refinery would be the most unfavorable scenario for Serbia.

"The refinery must be continuously modernized and harmonized with European standards. If there is no investment and development, the refinery will effectively shut down on its own. That would be a serious blow to the Serbian economy," she said.

Putnikovic added that the negotiations regarding the possible sale of the Russian stake in NIS are being conducted at several levels, that is, between Russia, Hungary, Serbia, and the United States - and Serbia, she emphasized, does not have a key role in making the final decision.

"Serbia is not the one that makes the decision about who will buy the Russian stake in NIS. That is done by the Americans. The Russians and the Hungarians can come to an agreement, but without the consent of the United States, that deal cannot be realized," she said.

Putnikovic added that Serbia's biggest fear is the possibility that the potential new owner will change the business strategy and reduce the importance of the Pancevo refinery.

"There has been talk about building a pipeline between Hungarian and Serbian refineries. If the refinery in Pancevo is to work at full capacity, the question arises why such a pipeline would be a priority. This immediately raises fears that derivatives could be delivered from Hungary, as production in Serbia declines," she said.

A possible downgrade of the Pancevo refinery operations would have serious consequences for domestic petrochemical and other industries, and employment, Putnikovic said.

"Everything that is not produced in Serbia does not contribute to our GDP or strengthen the domestic economy. The refinery is not only a budget filler, but a driver of industrial development," said Putnikovic.

She also believes that Serbia must take care of the long-term energy strategy, especially in the circumstances of global geopolitical changes and energy transition.

"Serbia must provide enough electricity, gas and oil derivatives so that the economy can develop. Without secure energy stability, there is no serious economic development," said Putnikovic.

The Energija Balkana editor also said that, regarding the possibility of new US sanctions against NIS, citizens should not expect dramatic moves in the short term.

"I think there is no reason for fear. The Americans will probably prolong the decision again unless Serbia takes steps that would be against their interests. However, the problem is that the NIS cannot develop normally because of the sanctions," Putnikovic concluded.

(Telegraf.rs/Tanjug)