Increased usage of fuel depots, the need to construct new tanks and logistical infrastructure, implementation of innovative fuel quality control methods – these are some of the effects of the so-called fuel package. The tightening of the tax collection system hit the grey market and thus increased the demand for legal fuel – writes Bartłomiej Sawicki, editor at BiznesAlert.pl.
“On some days the number of tanker trucks waiting to enter our base is very high. We built a temporary parking lot to facilitate the needs of our clients. News hosts are talking about numbers and percentages. Whereas in our case the fuel package increased the number of our clients and the amount of fuel released to the fuel market,” an employee of the fuel base no. 5 in Emilianowo owned by OLPP (Operator of liquid fuels) told BiznesAlert.pl.
Last week OLPP and PERN S.A. hosted representatives of the Federation of European Tank Storage Associations (FETSA). The delegates visited a fuel base located in Emilianów in the Klembów district in the wołomiński poviat in the mazowieckie voivodeship.
Intense work at the base
Despite the fact that it was constructed in the early 1960s, the base boasts one of the most modern installations for storing, distribution and fuel quality control. The fuel base no. 5 in Emilianów offers gasoline and diesel oil storage. It takes up 23.55 ha and has 21 overground tanks with a total capacity of 125 thousand cm, pumping stations and installations for loading fuels for road and rail tanker transport.
“The representatives were very interested in the site’s sewage treatment plant and Poland’s only mobile prover. Already in 2015 OLPP added to its services the verification of measuring instruments results with a mobile prover and the verification of measuring instruments results as part of an external meteorological audit conducted by the relevant regional measurement bodies and bodies notified at OLPP’s Measurement Centre. Whereas in 2016 the prover received an expertise certificate from the Central Office of Measures,” explained Mateusz Stańczyk, head of OLPP’s Measurement Centre.
OLPP’s Measurement Center is able to verify measuring systems on pipelines for constant and dynamic measurement of the volume of liquid, except for cryogenic liquids, of a flow rate not exceeding 12,000 dm3/min (6,000 dm3/min – as part of external metrological audit) and measuring systems for (un)loading ships and rail and road tankers, except for liquefied petroleum gas and cryogenic liquids, of a flow rate not exceeding 12,000 dm3/min (6,000 dm3/min – as part of external metrological audit).The measurement uncertainty of the mobile prover is 0.052 percent (with a probability of expansion at about 95 percent and coverage factor k=2).
The OLPP’s employees who gave the guests a tour around the facility stressed that since the fuel package had entered into force, fuel trade has significantly increased. In documents the growth is displayed by the charts, but on site it is measured by the number of serviced tanker trucks and the liters of released fuel. “Even before the package entered into force we dealt with about 150 rail tankers a day, and in June we beat the record and our depot recorded 306 fully loaded rail tankers within 24 hours. In September we surpassed that record and loaded 309 tankers within 24 hours. It is worth remembering that we are not OLPP’s biggest fuel base. The results at other depots, for instance in Koluszki or Rejowiec are even more impressive and show the extent of the changes,” one of the employees said.
He also added that fuel blending services, whereby biocomponents are added to fuel, are very popular. This makes the depot’s offer even more attractive and allows its clients to comply with the requirements of the Polish law.
“The number of tanker trucks is similar to the amount of railway tankers. Everything depends on the season and on the fuel price forecasts. We can’t complain about not having enough work,” our interlocutor continued.
“There are plans to build two additional tankers in Emilianów. It is too early to talk about their capacity, but our needs are increasing together with the growing market demand,” Paweł Stańczyk, OLPP’s CEO said. “Lines to get fuel are forming both here as well as at the other depots owned by our company,” he added. “We opened temporary parking lots, we are planning to construct permanent ones on adjacent plots. OLPP owns a network of 19 fuel depots across Poland whose total capacity is about 1.8 mcm. The data we have received so far show that the fuel package turned out to be a huge success,” the CEO stated.
Impact of the fuel package
The goal of the regulations introduced a year ago was to limit VAT fraud. Currently, if the fuel is bought in the EU, the VAT has to be paid to the tax office within 5 days of the load entering Poland. Previously only the re-selling of fuel in the country was taxed. “This made VAT fraud and tax avoidance easier. This was mostly done through creating a chain of companies,” Paweł Stańczyk explained to BiznesAlert.pl. He added that before the fuel package had been introduced about 750 tanker trucks entered Poland through its western border daily and were never audited. “Currently this has been curtailed and the number of such trucks has been significantly reduced. Trade of fuel from illegal sources has decreased. The fuel turnover went up on average by 30 percent depending on the period. This is real profit for the Polish budget,” Stańczyk stressed. When asked whether there have been any attempts at circumventing the new regulations he replied affirmatively, but added that so far the demand for legal fuel has not dropped. “On the contrary, in August when the demand usually goes down because of the end of the holiday season, this year we registered yet another spike,” the CEO said.
The OLPP CEO cited data, which show that in the first half of 2017 the state budget earned an additional PLN 17.5 bn from VAT. “Additionally as of April every tanker truck that carries fuel has to be registered in the SENT system. We know who enters the country with what cargo,” he said. He also pointed that was possible not only thanks to the fuel package, but also to the energy package and the transport package, which together form the so-called fuel three-pack.
According to OLPP data, the company has also seen an increase in the unloading of fuels delivered to Poland across the sea. “Since September 2016 we have recorded a 300 percent increase in comparison to the same period in 2015. This year the demand for this service grew by another 150 percent in comparison to the previous one. The transshipment of petroleum products from sea tankers at the depot in Dębogórze will reach 1.5 m tons,” a representative of the company predicted.
In 2018 after OLPP will merge with PERN S.A., the company will construct new storage tanks. One of the key investments will be the expansion of the depot in Dębogórze where a new tank will be constructed and the efficiency of loading fuels onto rail tankers will be improved. This will allow the company to offer services to bigger tankers in the future.
OLPP counting on good cooperation with FETSA
The FETSA representatives were impressed by the depot’s technological level and by the technological application of the entire process of filling up the tankers. In this regard they enquired about the countermeasures against cyber threats, which pose a risk to the fuel sector. They paid a lot of attention to the high environmental protection standards ensured by the place’s sewage treatment facility and the mobile prover.
“We are pleased to host FETSA representatives in Poland for the second time. The first visit was two years ago when the delegation had the opportunity to see the construction of PERN’s oil terminal. This time the FETSA representatives visited fuel base no. 5 owned by our company. OLPP believes staying in touch with foreign companies, which are members of FETSA, is a great opportunity to exchange experiences and hold constructive discussions on EU legislation,” OLPP’s CEO stressed.
The Federation of European Tank Storage Associations (FETSA) was established in 1991 and gathers operators from Europe and Turkey. Its mission is to monitor EU legislation with regard to its impact on the activities of the Federation’s members. It also strives to promote knowledge and skills development to support governments in creating efficient and viable regulations.
The representatives of OLPP and PERN S.A., companies which will soon merge, stressed that the cooperation with the European organization was extremely important as it enabled knowledge and technology exchange. It also allowed to jointly push the sector’s agenda in Brussels, where the organization is located. The Poles pointed out that in the last few years Poland had changed its strategy to diversify and increase imports of oil other than Ural thanks to the expanded terminal in Gdańsk.
The guests were also interested in the Sarmatia project, whose goal is to deliver oil to Ukraine and Poland from Azerbaijan via the Odessa-Brody-Gdańsk pipeline. However, so far no key decisions, which would put the project on a viable schedule, have been made.
PERN announced a tender for the construction of two tanks at the storage depot in Gdańsk. The tanks’ volume will be 100 thousand cm each, both will be adapted to hold crude oil and will be equipped with associated infrastructure. Earlier the company announced the new tanks would be built before 2020.
At the beginning of 2018 PERN will merge with OLPP by taking over the company. In result one entity will be created to manage transport and storage of crude oil and liquid fuels.