Latvians Make Strong Case for Oil Delivery

According to Ventspils free port board chairman Aivars Lembergs, businesses make lower profits while transporting oil via Russia's ports than they could make, transporting it via Ventspils port in Latvia and Butinge in Lithuania

Lembergs said data for January and February show that the profit per ton of oil at Russia's Primorsk port was $7.8 lower than if it was handled at Ventspils or Butinge. At Novorossiisk port the profit is even $12.3 lower and Odessa port -- $14.6 lower.

Lembergs said that although the oil exporting costs by pipeline to, for example, Primorsk, are lower and the handling tariff at Primorsk is lower too, the ship freight rate costs are higher there -- in Ventspils the figure is $9 per ton while in Primorsk -- $21 per ton.

"What is won on lower pipeline and port tariffs is fully lost, paying to the ship owners for delivery of the cargo to the market place. And the freight rates in Russia can not be influenced in any way unless the world market is privatized," said Lembergs.

"If business approach was in place in Russia, the oil would have been transported via Ventspils and Butinge ports and the remainder was sent via Russia's ports," said Lembergs who also is Ventspils mayor.

However, Russia has decided not to transport oil by pipeline to Ventspils and so Ventspils port is now only handling oil cargos delivered to it by railway.