What will fuel prices be like at the end of the holidays? It could be cheaper than last year

“Strong discount” in the fuel market

On Friday, e-petrol.pl analysts noted that the “heavy discounting” in recent days on the wholesale fuel market indicates an acceleration of discounts at gas stations. The e-petrol.pl forecast for retail fuel prices in the last holiday week assumes the following price ranges for individual fuel types: PLN 6.19-6.30/l for 95-octane gasoline, PLN 6.20-6.32/l for diesel and PLN 2.79-2.85/l for autogas.

According to data from e-petrol.pl, a liter of 95-octane gasoline currently costs an average of PLN 6.32 and is 2 groszy cheaper than a week ago. Diesel fuel has decreased by 1 cent to PLN 6.34/l. Autogas prices are rising for the fourth week in a row. The price of this fuel has increased by 1 groszy and is currently PLN 2.79/l.

The portal’s experts noted that gasoline and diesel have been getting cheaper since mid-July, and before the end of the month, discounts at gas stations “are expected to accelerate even further.” They noted that retail prices for automotive gas were moving in the opposite direction. “The drivers are supported by the strengthening of the Polish zloty against the dollar and crude oil prices remaining close to this year’s lows,” they explained. Analysts added that diesel fuel costs are at their lowest level this year, and gasoline prices are slowly approaching January’s lows. “Thanks to systematic reductions, which will gain momentum by the end of August, holiday returns will be cheaper than last year,” they predict.

Last week, analysts also noted price levels not seen for a long time in the price lists of domestic fuel producers. “Diesel oil with a price of PLN 4,689.00/m3 on Wednesday was the cheapest since January 2022,” analysts said. “In the case of 95-octane gasoline, we recorded price levels similar to those on Thursday, i.e. PLN 4,659.80/m3, for several days in December last year, and apart from this short period, to find similar prices, we also have to go back to January 2022,” they said.

Analysts added that unleaded 95-grade gasoline at refineries is valued at an average of PLN 4,663.80 per cubic meter, which is PLN 142.20 cheaper than at the end of last week. Diesel fuel, valued at PLN 4,705.40/cubic meter, became cheaper by PLN 127.20 over the week.

There are many arguments in favor of low fuel prices

As the portal’s experts recalled, in early August it was reported that foreign supplies of raw materials to China reached 42.34 million tons, or less than 10 million barrels per day. “The July import result is 12 percent lower than a month ago and 3 percent lower than a year ago. The weaker July result was influenced by low margins in the processing of raw materials and – what is particularly important – by the fall in demand for fuel, which hit the production demand of both state-owned plants and independent refineries,” the experts explained.

According to analysts, Chinese demand may be responsible for the fall in oil prices predicted by Goldman Sachs analysts. In their opinion, Brent oil prices will fall to $68 per barrel by the end of 2025. “The dynamics of declining oil demand in the world’s second largest oil consumer could amount to 0.2 million barrels per day in the first half of this year,” they predict.

Experts noted that another factor contributing to the decline could be reports of attempts to reach a settlement in the Middle East. “US Secretary of State Anthony Blinken went to Cairo to try to negotiate a way to halt the escalation of violence. If successful, the “risk premium” contained in oil prices, which is linked to the security problems of oil transit in the region, would certainly be reduced to some extent in the Red Sea or the risk of a third country, for example Iran, being involved in the conflict,” they noted. They added that the problem of maritime security is real, as evidenced by recent reports of the attack on the Greek oil tanker Sounion, which was fired upon 142 km from the Yemeni port of Hodeidah.

According to analysts, an argument for lower oil prices could also be the conclusion of the Global Research report prepared by Bank of America, which suggests increasing non-OPEC+ crude oil production this year, in particular from Brazil, Guyana, Canada and the United States, by around one million barrels per day in 2024 and by 1.6 million barrels per day in 2025 (PAP).

ab/malk/