MOL Reports Janaf to the European Commission for Abuse of Position

Hungarian MOL and its Slovak subsidiary Slovnaft have reported the main operator of the oil pipeline Janaf and this for abuse of monopolistic position, MOL announced on Wednesday.

MOL and Slovnaft have filed a formal complaint with the Directorate-General for Competition of the European Commission, claiming that Janaf is abusing its monopolistic position, MOL reported on Wednesday.

MOL reminds that on January 27 of this year, the supply of crude oil to Hungary and Slovakia via the Druzhba pipeline was interrupted. The pipeline has been out of operation since then, significantly increasing the dependence of land refineries in Central and Eastern Europe on Janaf as the only viable route, says MOL.

Furthermore, it claims that Janaf has a monopoly on supplying Hungarian and Slovak refineries with oil coming from the sea and that despite the fact that in such cases the supply of these two countries with Russian crude oil delivered by sea is allowed and in accordance with EU and US sanctions, Janaf is delaying its acceptance, citing additional legal checks.

MOL claims that Janaf does this despite the fact that according to EU sanctions, Hungary and Slovakia can procure Russian crude oil that is not subject to sanctions and by sea, if the Druzhba pipeline is not operational.

It adds that since the interruption of supply via Druzhba, it has repeatedly requested confirmation from Janaf that it will take over the cargo of crude oil of Russian origin delivered by sea that has been legally imported in accordance with EU and US sanctions rules, but this has not happened.

According to MOL’s interpretation, EU competition law states that a company that has a monopoly over energy infrastructure is in a dominant position. According to MOL and Slovnaft, Janaf is abusing its dominant position.

In their letter to the European Commission, MOL and Slovnaft also claim that Janaf has been charging three to four times the fair market price for transport since 2022.

Hina has requested reactions from the Ministry of Economy and Janaf regarding the submission of MOL’s complaint to the European Commission, which are expected during the day.

However, Croatia has repeatedly emphasized that Janaf is ready to supply MOL’s refineries in Hungary and Slovakia with sufficient quantities of non-Russian crude oil at competitive prices.

MOL’s complaint that Janaf’s transport tariffs are too high has been dismissed by Janaf, emphasizing that the MOL Group is trying to create an appearance of justification for its own import of discounted Russian oil, on which it makes about one billion euros in additional profit annually.

The difference in the total price of crude oil does not arise from transport, but from the fact that Russian crude oil is about 30 percent cheaper than non-Russian, Janaf said, emphasizing that pipeline transport contributes only a few percent to the total price of oil and is not a decisive factor, Janaf announced on Tuesday.

Šušnjar: MOL’s Arguments Don’t Hold Water

Minister of Economy Ante Šušnjar reiterated on Wednesday in an interview with the Financial Times that Janaf has the capacity to supply refineries in Hungary and Slovakia.

He reminded that the Adriatic pipeline can transport up to 15 million tons of oil annually, which is more than enough for the needs of refineries in both countries.

“It is time for everyone in the European Union to move away from dependence on Russian fossil fuels, and Hungary and Slovakia to fully utilize the existing infrastructure that enables safe and stable supply from alternative sources. They are doing this because non-Russian oil is currently flowing normally through Janaf to MOL’s refineries. Croatia has a solution. Janaf has the capacity. Excuses change daily, but it is clear to everyone that they no longer hold water,” Šušnjar wrote on X.