When it recently became clear that Russian gas continues to enter the Czech Republic, the state began to consider how to prevent this in the future.
The Ministry of Industry and Trade (MPO) believes that the situation would be helped if Petr Fiala’s government cabinet approved the creation of the so-called State Energy Trader – in other words, to establish a state-owned and managed company that would be in charge of gas purchases.
Currently, the purchase of gas for domestic customers is not centralized, it is handled by traders such as ČEZ, innogy or RWE.
“The state trader would not buy gas from Russia. It could therefore contribute to limiting gas supplies from Russia to the Czech Republic,” Vojtěch Srnka, spokesman for the Ministry of Trade and Industry, told Seznam Zprávám. With the fact that the importance of such an enterprise for ensuring the stability of gas supplies and prices was underlined by the Russian war in Ukraine and the resulting energy crisis.
The establishment of the State Energy Trader has been talked about for a long time. Although the MPO now has a clear idea of the benefits of creating a “state gas company”, according to Seznam Správ findings, the Ministry of Finance (MOF) is not 100% convinced of these reasons – at least not yet.
“At the moment, the project is in the phase of informal discussions between the Ministry of the Interior and the Ministry of Finance,” Michaela Lagronova, director of the communication department of the Ministry of Finance, told Seznam Zprávám.
It would be the department of the Minister of Finance Zbyňek Stanjura, which should possibly establish the state trader. One of the main reasons is money, personnel and the ratio of power distribution in the management of the company would also have to be resolved.
The start-up costs are estimated to be in the hundreds of millions of crowns, leading experts in the gas trade would have to be hired, and there is still no consensus on which ministry would have the majority on the new company’s board of directors. Officials of the Ministry of Finance are also asking themselves, off the record, how a state trader could guarantee and ensure that traders on the gas market do not supply him with goods of Russian origin.
Gas expert Vratislav Ludvík is convinced that the Czech Republic needs a state gas trader. According to him, the necessity is all the more urgent at the moment.
“It should preferably not be a general trader, but a supplier of gas for state institutions and facilities. The advantage of such an arrangement is primarily in the immediate control of the reliability of gas supplies, especially the level of import prices achieved. Direct purchases and long-term contracts with direct gas producers reduce the price of gas, which does not have to be purchased through intermediaries,” Ludvík told Seznam Zprávám.
According to him, the issue of security is related to this, which also reflects the fact that the Czech Republic would be zero dependent on gas from Russia.
“In addition to the mentioned advantage of lower prices, it is also necessary to take into account the increase in safety. The control of gas supplies for the mentioned state institutions and bodies also includes the selection of suppliers, so it should be easy to avoid imports from areas that cannot be described as problem-free from the point of view of our state,” added a leading Czech gas expert.
The general director of the Czech Gas Association also positively evaluates the establishment of the state trader, who sees its role mainly in foreign transactions.
“The state trader could play a positive role in negotiating, for example, long-term contracts on a government-to-government basis. On the domestic market, it seems to me that there is enough competition among traders,” Josef Kotrba told Seznam Zprávám.
We do not need to import Russian gas to 🇨🇿, and we have created supplies for this winter without any problems. This week, we found out from the ERO’s monthly data that since October, some traders nevertheless started importing gas from Russia to us. In total, until the end of October, gas from Russia accounts for 1.2… pic.twitter.com/RPR40AtAeM
— Jozef Síkela (@JozefSikela) November 25, 2023
The Czech Republic used to be almost completely dependent on Russian gas supplies. The situation changed last February after the outbreak of Russian aggression in Ukraine, when Fial’s government gradually managed to reduce the aforementioned dependence to minimal values.
Gas continues to flow from Russia to Austria, Hungary and Slovakia, which means that at certain times the raw material of Russian origin reaches countries other than Russian gas consumers. In the case of the Czech Republic, it is just over one percent of total deliveries.
“This week, we found out from the ERO’s monthly data that since October some traders still started importing gas from Russia to us. In total, until the end of October, gas from Russia represents 1.2 percent of total supplies for 2023,” said Minister of Industry and Trade Jozef Síkela (STAN).
In the past months, the Czech Republic managed to get both gas storage tanks and gas pipelines under control.
A chance for a discount
Gas expert Vratislav Ludvík believes that the state trader would find use especially with public institutions and authorities.
“The purchasers of gas from the state trader would be entities within the competence of the Ministries of Defence, Interior, Health, Education, Justice, Government, Parliament and State Administration bodies and other objects of strategic importance. I don’t dare to estimate how much gas could be traded in this way, but these are undoubtedly volumes that justify the establishment of this new institution,” said Ludvík, deputy for energy at the Ministry of Industry and Trade in the early 1990s.
According to him, the establishment of a state gas trader would have an effect on the entire domestic gas market.
“Currently, gas is imported to us from three main destinations – Norway, the USA and Qatar. Almost ninety traders are up against the three suppliers. There is therefore a clear disparity, the engine of which is the resale of imported gas, i.e. a higher price for customers. Here, too, the state trader could have a positive effect,” he added.