1. ČAPPO Czech Association of Petroleum Industry and Trade NOIA Meeting Bratislava 2015

2. Retail market in Czech Republic # FS20102011201220132014 public3 6723 7173 7283 7453 792 thereof FS with more products 2 6752 7022 7452 7622 782 limited access293397472573614 non-public2 6262 5762 5902 6002 607 Total6 5916 6906 7906 9187 013 FS offering biofuels # FSpubliclimited accessnon-publicTotal Fuel B302332740300 Fuel B1001101858186 Fuel E8518901190 Source: Ministry of Industry and Trade

3. Concentration in refineries and retail after acquisitions (since 2012) 318 FS controlled by Slovnaft Retail: six biggest retailers in ČR Refineries: (Česká rafinérská) 2005 Unipetrol (PKN Orlen) 50,2%, ENI 16,6%, Conoco 16,6%, SHELL 16,6% 2007 Unipetrol 50,2%, ENI 33,2%, SHELL 16,6% 2014 Unipetrol 66,8%, ENI 33,2% 2015 Unipetrol 100% (acquisition not finished yet)

4. Petroleum Products Supply Source: Czech Statistical Office, data in 1000 Metric Tons

5. Biofuels The legislation Climate Protection Act (2012) volume obligation: a minimum of 4.1% bio-component in petrol, 6% bio- components in diesel per calendar year. It can be performed by admixing of highly concentrated bio-components emission obligation: to reduce emissions by 2% to 31.12.2014 (fulfilled), by 4 % to 31.12.2017 – difficult to achieve and assuming an increase in the proportion of highly concentrated bio-components, by 6% to 31.12.2020 – unrealistic Excise Duty Act to 30.6.2015 (notification to EC in progress) providing significant tax relief for highly concentrated biofuels based on „ M ulti-annual national program of biofuels promotion 2015-2020" the Excise Duty Act is to be amended to cater for continued tax support of the biofuels; adoption of this proposal by the parliament is at risk though

6. Grey zone Fraud in the field of value added tax carousel fraud in estimation amount of 5-8 billion. CZK per year (185-290 million EUR) in 2009 -2013, the competitive environment threat introduction of deposit of 20 million CZK (0.75 mil. EUR) and other legislative measures led to reduction of number of distributors from approx. 1800 to approx. 160, this type of fraud almost ceased. Deposit challenged by the Constitutional Court, the Parliament has discussed an amendment to the Act. support for implementation of the reverse charge for fuels Fraud in the area of excise duty fraudulent company rapidly increasing trading volumes in excess of the established guarantee, thereafter the company liable to pay excise duty ceases to operate/exist. From 1.1.2015 more stringent conditions for the operation of tax warehouses and increased cash collateral from 100 mil. CZK (3,7 mil. EUR) to 1 500 mil CZK. (55,5 mil. EUR). False declaration of specific mineral oils as diesel upon imports. Since 1.1.2015 a register of subjects dealing with special mineral oils is in place; in addition, such trade/transport must be reported 24 hours in advance.

7. Grey zone II Fraud in the area of biofuels sale of fuels without bio-components during the year (price advantages), at the end of the year, the company becomes unavailable and avoids paying penalties for failure to comply with bio obligations It should be addressed by an amendment to the Climate Protection Act (more precise definition of B100 use, bio obligations fulfillment for the quarter a minimum of 70%). The amendment dealt simultaneously with the variation of excise duty rates for highly concentrated biofuels (see above), its further negotiations is at risk

8. Emergency oil stocks The legislation The Act on emergency oil stocks, … (1999) stocks are hold and funded by the State and their replacement is done through the State Material Reserves Administration stocks a minimum 90 days, generally crude oil reserves around 70 days and products approx. 20 days stocks based primarily in the Czech Republic – company MERO stocks crude oil, company ČEPRO products. Both companies are state-owned. long-term plan is to increase the reserves for 120 days and the involvement of the private sector in their funding - under consideration