Pancevo Refinery: 9,500 Tons a Day, License Ends Aug. 28

The Pancevo refinery processes about 9,500 tons of crude oil a day, and the operating license issued to it by the US Office of Foreign Assets Control (OFAC) expires on August 28, 2026. Those two figures explain the order of priorities that Minister of Mining and Energy Dubravka Djedovic Handanovic set out in an interview with Vecernje novosti, carried by the Beta news agency on August 9 at 09:13: she placed the state of Serbia’s oil company, Naftna industrija Srbije (NIS), ahead of the drought and record low water levels.

On the Pancevo plant, she said it runs “from month to month, from license to license.” A permanent solution for NIS, in her assessment, is a condition for a more stable power system and for the refinery to be able to source crude oil at all. She described the drought as a problem with an expiration date:

Problems with water levels will pass, but what matters is that in the coming weeks we manage our power system responsibly

She added that the state will do everything to safeguard supply security and prevent a sudden rise in energy prices.

Why a one-month permit is holding back processing

The link between how long the license lasts and how much crude leaves the refinery was put most precisely by NIS’s general director Kiril Tjurdenjev:

Our processing averages 11,000 tons a day, or 330,000 tons in August, which is the maximum we can reach with a license valid for only one month

This is about procurement lead times, not plant capacity. Crude oil is contracted and delivered in cycles longer than the license under which the refinery operates, so the processing plan is drawn up on a horizon shorter than the delivery itself. The minister made the same point in her account of the August 5 meeting with NIS representatives and the Oil Companies Association of Serbia (UNKS): processing rises only in the second half of the month, once earlier ordered quantities arrive.

The announced jump from 9,500 to about 13,000 tons a day is a 36.8 percent increase in processing. Until then, the refinery runs at a level a third below its own target.

How much fuel does Serbia need in August?

Demand for oil derivatives in August is estimated at about 200,000 tons, with diesel accounting for most of it. The balance covering that demand looks like this:

• planned diesel imports of about 39,000 tons, the same as in July, of which about 20,000 tons, or 51.3 percent, was supposed to arrive by river
• about 23,000 tons of NIS’s operational reserves were made available to other oil companies, covering 11.5 percent of monthly demand
• about 19,000 tons of Euro diesel from operational reserves were released earlier, during July, under the same mechanism
• the ban on exports of crude oil and oil derivatives, including Euro diesel, has been extended through the end of August
• kerosene reserves are sufficient for a month and a half of consumption

State commodity reserves, according to the minister, are kept for situations of extreme necessity. That means August is being covered by production in Pancevo and companies’ commercial stocks, not by state intervention.

The Danube and the cost of logistics

The Danube’s water level is at a record low, so quantities that don’t arrive by barge move by rail car and tanker truck instead. The effect shows up on two fronts: fewer tons per shipment and a higher cost of importing, all under a regime of capped retail prices. Importers’ margins get squeezed from both ends.

External pressure is arriving at the same time. Russia has banned exports of oil derivatives, and Turkey has bought a million tons of diesel on the Mediterranean, pushing up prices on the market Serbia draws from when domestic production falls short.

A deadline that falls three days before month’s end

The license expires August 28, three days before the end of the month. Crude oil procurement for September and importers’ plans for the fall are therefore being made without an answer to whether the refinery will even be operating by then. For a company that has announced its best August sales of diesel and gasoline in five years, that is planning with a blank field in the table.

The next date that changes anything is August 28. Until then, processing in Pancevo is measured day by day, not by the quarter.