Each subsequent increase in wholesale fuel prices will limit the scale of potential price reductions in retail, but this should not ultimately eliminate the positive effects of lowering the excise tax on fuels from December 20. Due to the lower rates, we can count on reductions of up to PLN 0.18 per liter of petrol and autogas and PLN 0.10 per liter of diesel, according to a market commentary by BM Reflex analysts.
Below is the market comment of BM Reflex:
Due to the drop in oil prices from USD 85 / bbl and the appreciation of the zloty against the dollar, wholesale fuel prices fell. And although the lowest ones did not last long, there is still room for price reductions at the stations. Only this week in wholesale the price of Pb95 gasoline increased again by PLN 0.15 / l net, and diesel by nearly PLN 0.33 / l.
The reductions in fuel prices at filling stations, initiated last week, were continued. As a consequence, the average fuel prices dropped by 2 to 5 groszy per liter and on 9-12-2021 they are respectively for: 95 lead-free petrol – 5.99 PLN / l (-5 groszy / l), 98 – 6 lead-free petrol, respectively. PLN 30 / l (-3 gr / l), for diesel – PLN 6 / l (-4 gr / l) and autogas – PLN 3.38 / l (-2 gr / l).
It is worth noting that each subsequent increase in wholesale fuel prices will limit the scale of potential price reductions in retail. This should not eliminate the positive effects of the reduction in excise duty on fuels from December 20. Due to the lower rates, we can count on reductions of up to PLN 0.18 per liter of petrol and autogas and PLN 0.10 per liter of diesel.
On Friday morning, February’s series of Brent crude oil contracts were trading at $ 74.50 / bbl. On a weekly basis, crude oil increased by around USD 5 / bbl, thus the market corrected the recent wave of price decline by over 50%.
There is a lot of uncertainty in the market regarding the development of the current wave of the pandemic. The belief in an adaptive (if necessary) OPEC + policy seems to protect the market from returning to major declines.
The American EIA, according to the latest forecasts, expects average Brent crude oil prices in December at $ 71 / bbl and $ 73 / bbl in Q1 2022. The EIA notes that the new coronavirus variant increases uncertainty for energy demand forecasts.
Source: BM Reflex and ISBnews
