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Old East Bloc Faces Double Whammy on Oil : Europe: A dramatic drop in Soviet supplies and the gulf crisis have created serious shortages. Motorists are lining up to buy gas.

October 05, 1990|From Reuters

PRAGUE, Czechoslovakia — Starved of Soviet oil and priced out of world markets by the Persian Gulf crisis, central Europe is being racked by gasoline rationing, skyrocketing prices and widespread panic.

Motorists lined up for hours at gas stations throughout Czechoslovakia today, many sleeping overnight in their cars, after the announcement that a form of rationing will begin Saturday.

President Vaclav Havel was trying to arrange an emergency meeting with Soviet President Mikhail S. Gorbachev to discuss the crisis caused by reduced output of Soviet oil. Weekend talks on the issue among the Polish, Hungarian and Czechoslovak finance ministers were canceled.

Until the end of October, Czechoslovak motorists will be allowed to buy only six gallons of gas at current prices.

Otherwise, they will have to pay one-third extra, bringing the price of 92- and 96-octane fuel to double the levels of July, before cutbacks in Soviet supplies became acute.

There are also long lines for gas in Bulgaria, which introduces rationing Oct. 15, and Poland, where prices went up again today and now are more than 50% higher than before the Iraqi invasion of Kuwait on Aug. 2.

Romanian Prime Minister Petre Roman said today that his country faces serious energy shortfalls that will create "a worrying situation that will be hard to overcome in the next six months."

The Soviet Union has cut supplies to most of its former East Bloc allies to about 30% below contracted levels. The so-called Friendship Pipeline to Hungary stopped altogether for six days last month.

But Bulgaria has been even worse hit, receiving only about 50% of its oil needs, a senior official from the state oil company said.

"Bulgarian tankers are in Soviet ports expecting oil but without any success," another state oil official added.

According to a current joke in Bulgaria, however, the gas crisis is nearing its end--because there is no more gas.

The Soviet Union agreed to deliver 20,000 tons of oil to Czechoslovakia today and up to 35,000 tons over the next few days but could not guarantee that supplies would not drop again, the state news agency CTK reported.

Panic buying of gas spread across Czechoslovakia after Slovak Prime Minister Vladimir Meciar said Wednesday that oil reserves in the country would last only two days.

Some officials said reserves in Czechoslovakia were sufficient for eight days, and the director of an oil processing plant in northern Bohemia said the Soviet Union had recently supplied his plant with more oil than necessary.

"We still have enough gasoline," a senior official in the state-owned company Benzina said. "Our reserves are rather large, but with the current panic, they will only last some two or three days."

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