“For the past four weeks, fuel prices in Poland have been the lowest in the entire European Union. According to data from August 10, 2022, published by the industry portal e-petrol, we will now pay an average of PLN 6.86 (EUR 1.47) for a litre of gasoline in Poland. For the same product, Bulgarians have to pay more, PLN 7.75 (EUR 1.66),” PKN Orlen reports.
“For the past four weeks, fuel prices in Poland have been the lowest in the entire European Union. According to data as of August 10, 2022, published by the industry portal e-petrol, we will now pay an average of PLN 6.86 (EUR 1.47) for a litre of gasoline in Poland. For the same product, Bulgarians have to pay a few cents more, as much as PLN 7.75 (EUR 1.66). The situation is similar in Romania where gasoline costs PLN 7.81 (EUR 1.67). Slovaks and Czechs, on the other hand, pay for a litre of gasoline PLN 8.51 (EUR 1.82) and PLN 8.47 (EUR 1.81), respectively. Our neighbours are also fueling diesel more expensively – drivers in Poland will now pay PLN 7.13 (EUR 1.52) for a litre of diesel, and in Romania PLN 8.40 (EUR 1.80). In Latvia or Estonia, it’s PLN 8.39 (EUR 1.79) and PLN 8.65 (EUR 1.85), respectively,” Orlen reports.
At the same time, it should be remembered that the main components of fuel prices – oil, electricity and gas used in production, biodiesel, and logistics – are market prices and are at similar levels for all producers in the region, regardless of the level of average earnings in a given country.
It can be seen that this week the fuel prices in Poland continue to fall, with many Orlen stations now paying less than PLN 7 (EUR 1.50) for gasoline. It should be remembered that the prices reported by e-petrol do not take into account the reduction at Orlen stations of 30 gr (EUR 0.06) for all users of the Vitay loyalty program and 40 gr (EUR 0.08) for users of the Large Family Card. This applies to both gasoline and diesel fuel.
Daniel Obajtek, CEO of PKN Orlen, also spoke about fuel prices on August 1 during a press conference related to the finalization of the Orlen-Lotos merger.
“We are making history. We have merged PKN ORLEN and Grupa LOTOS today (…) The strong business of the new group will be built around the most valuable business segments leveraging the combined capabilities and resources of PKN ORLEN, Grupa LOTOS and soon, of PGNiG. As a result, the resilience of the new group will be significantly enhanced amid a difficult and extremely volatile environment. This in turn will provide Poland and Poles with stable and reliable sources of energy – both in transport and industry,” Daniel Obajtek, President of the Management Board of PKN ORLEN, said then. On social media, in turn, he indicated that the benefits for safety and Poles’ wallets can be expected “soon.”
“This merger will strengthen us and cause numerous synergies, strengthen our economic alliances, stabilize investment processes, and improve our security. The effects of this merger will benefit all Poles. The drivers will tell the difference,” he added.
It is not that fuel sale is an engine room for Orlen’s profit. According to the company’s official announcement, nearly 50% of revenue comes from sales abroad. Moreover, only 8% of operating profit comes from sales at Orlen stations in Poland. And we’re talking not only about sales of fuels, but also non-fuel products, such as popular hot dogs.
Orlen is investing its profits. From 2018 to the first quarter of 2022, the company invested PLN 35 billion, and during that time its profit totalled PLN 27 billion. This year, PKN Orlen has announced that it will spend a record PLN 15 billion on investments. In the first half of the year, the Orlen Group made investments of PLN 6.3 billion, almost as much as the Group’s entire investment spending in 2014-2015.
Changes in fuel prices are affecting all countries in Europe and around the world. This is an obvious cost of war. Since the beginning of the Russian aggression, individual European countries have radically reduced the supply of oil and fuels (diesel) from that country. The sanctions being implemented will virtually cut it off. What is more, the demand for oil and fuel is growing, which has caused fuel listing (gasoline and diesel) on European stocks, including the dollar exchange rate, to increase by 30-40 per cent since the beginning of the war, and since the beginning of this year, the increase has been 55-70 per cent.
A radical and bottom-up reduction in wholesale prices in Poland would export fuels from Poland to other countries where fuel is more expensive. Fuel is a regional product, and its import and export can take place freely within the EU. As a result, there could be a situation where fuel shortages would begin in Poland. Such a scenario, moreover, happened in Hungary, where fuel prices for Hungarians were artificially lowered by the government, and now there is a problem with fuel availability.
“Fuel companies do not make money on Poles – this is a myth!” Orlen writes.
According to POPiHN’s (Polish Organization of Oil Industry and Trade) official data (data below), vendors’ margins have dropped significantly compared to last year. After 6 months of 2022, the margin on diesel fuel fell by 100% (from PLN 0.07 (EUR 0.01) in 2021 to PLN 0 (EUR 0) in June this year.) In turn, the margin of fuel stations on Eurosuper95 gasoline in June was PLN 0.05/l (EUR 0.01), almost 65% less than in 2021 (PLN 0.14 (EUR 0.14)).