The IEA refers to government and agency stocks as “public” stocks (including stocks held by industry-owned stockholding agencies). Such stocks have the advantage of providing a clear indication of oil available solely for emergency purposes. In recent years, the role of public stocks has increased noticeably in the overall emergency response potential of the IEA, both in terms of the number of countries holding public stocks and in the total volume being held.
In 2013, 19 out of the 29 IEA countries held public stocks. This compares to 10 out of 21 member countries in 1984. This increase reflects a rise in the number of countries with stockholding agencies, which has increased from 4 to 12 since the early 1980s. With the recently adopted changes to the EU minimum stockholding rules, Italy has recently decided to create an agency and a number of countries are currently considering establishing agencies (e.g. Greece, Luxembourg and the United Kingdom). This could further raise the number of member countries holding public stocks in the future.
The relative portion of the minimum stockholding obligation covered by public stocks varies from country to country. In most cases, public stocks, including both crude and refined products, cover more than half of the country’s minimum stockholding obligation. In other countries public stocks cover well beyond 90 days of net imports (see Figure 2.2). In some instances, this is because of declining net imports, resulting in a greater number of days’ cover for a given volume of public stocks. In the case of Estonia, the IEA stockholding requirement in terms of net imports is substantially lower than the level of stocks the country must hold to meet its 61 days of consumption as a member of the European Union. Denmark also holds public stocks to meet its EU stockholding requirements; however, as a net-exporter, Denmark has no IEA minimum stockholding requirement.
In ten IEA countries, public stocks are combined with a minimum stockholding obligation on industry. These include Poland, Portugal and Spain, where the proportion of public stock cover is lower compared to other public stockholding member countries. In these countries, the remainder of the IEA minimum requirement is met by stockholding obligations set on industry. In the case of New Zealand, while there is no stockholding obligation set on industry, the country relies on industry’s commercial stocks to cover the bulk of its IEA minimum requirement and holds public stocks in the amount necessary to meet the remaining portion of the 90-day level.
One general attraction of a mixed system, where both public stocks are held and a minimum obligation is set on industry, is that it can improve overall “visibility” of emergency stocks while maintaining an operational link with the oil companies. This should help to ensure rapid drawdown in an emergency. Nevertheless, there is no single, perfect system for maintaining the required minimum stockholding level. Any given stockholding arrangement will have both advantages and disadvantages in terms of efficiency, cost and equity. Ultimately, the choice will depend on the particular country’s circumstances.