Fuel prices are not falling despite cheaper oil. Gasoline on the stock exchange is the cheapest in almost 5 years

Although crude oil prices were close to the lowest levels since winter 2021, prices at the pump remained virtually unchanged. This is not the first time that station operators are foolish and do not reduce fuel prices despite strong wholesale discounts.

In mid-October, the average retail price of unleaded 95 gasoline was at PLN 5.88/l and was a penny higher than a week ago – according to BM Reflex data. The average price of diesel oil across the country was PLN 5.97/l and it was the same as last week. Meanwhile, both crude oil and finished fuel prices fell significantly on global stock exchanges.

The average retail price of autogas remained unchanged (+1 grosz/l), and was filled at an average price of PLN 2.66/l. In September, the average national LPG price was as high as PLN 2.63/l and was the lowest since February 2022.

It is worth remembering here that we are writing about average prices throughout the country. Prices at individual stations may vary by up to several dozen cents per liter, depending on the location and the strength of local competition. For example, in Wrocław, for a long time you can find stations offering Pb95 gasoline for less than PLN 5.50/l.

Retailers capture the margin

The lack of significant changes in retail fuel prices in Poland would not be a surprise if it were not for the fact that globally we are observing a significant reduction in the prices of petroleum products. On Friday Brent crude oil cost almost USD 60 per barrel and reached its lowest price since May. Moreover, the May low (USD 58.51/bbl) marks the lowest price of this commodity since February 2021. For comparison, in February '21, we paid approximately PLN 4.75 per liter of Pb95 or diesel at Polish stations!

That's not all, however, because gasoline prices on the New York Stock Exchange dropped to USD 1.76 per gallon, which is the lowest price since the first weeks of 2021. In turn, diesel oil on the London ICE exchange fell to USD 630/t, although at the end of September it cost almost one hundred dollars more. Also the US dollar was slightly more expensive then than it is now. Therefore in such a situation, fuel in Poland should be much cheaper than it actually is.

Meanwhile, on Friday, October 17, Orlen offered Eurosuper95 gasoline at PLN 4,518/m3, which after adding 23% VAT (excise duty, fuel surcharge and other para-taxes are already included in the wholesale price) gives approximately PLN 5.56/l. That is practically the same as a week ago and at the same time 32 groszy/l below the average retail price.

In the Friday price list of the Płock refinery, Ekodiesel fuel was listed at PLN 4,523/m3, which after vating gives PLN 5.56/l. And this is as much as PLN 14/l cheaper than a week ago and already PLN 41/l below the average retail price. If wholesale rates remained at their current level, theoretically, retail petrol and diesel oil should also be much cheaper than they are now.

– After oil prices dropped to the lowest level in five months, it seems natural to ask when fuel prices at stations will drop. Before this happens, we will see further price declines on the wholesale market (…) Next week, prices at gas stations should start to fall, at least at some stations.
We will probably see the full impact of the current situation on the crude oil market in the last week of October, if the current low level of oil prices continues. – say BM Reflex analysts.

It is also worth remembering that fuels could be much cheaper if it were not for taxes imposed by the authorities. From every liter of gasoline or diesel oil purchased, over 50% goes to the state. Without paying tribute to the government, we could fill up with Pb95 petrol for approximately PLN 2.60, diesel for approximately PLN 2.70, and autogas for PLN 1.50/l.

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