17:29 22 June 2022
Post by: WBJ

Gasoline becomes more expensive than crude oil

Gasoline becomes more expensive than crude oil
Source: Photo by Jonathan Kemper on Unsplash

High fuel prices and the strong dollar are responsible for 2/3 of the fuel price increase in Poland. The rest is the result of increased travel demand, limited refinery capacity, and restrictions on fuel exports by China. That's why fuel is more expensive than crude oil. And there are more price increases ahead: vacations and the hurricane season in the USA.

"Careful observers have noticed that recently the price of petrol in Poland has increased much more than it would result from the increase in the price of oil and the weakening of the zloty alone. This process can be observed all over the world, where gasoline prices are growing more expensive than crude oil prices," Pawel Majtkowski, eToro analyst, said.

As of February 1, the reduction of vat and excise tax came into force, after which the price of petrol 95 dropped to around PLN 5.30 per liter. Today the price is already around PLN 7.90 per liter, which means a price increase of 49 percent. At the same time, the price of a barrel of Brent crude oil rose by 22 percent (from USD 90 to USD 110), and the zloty weakened against the dollar by 11 percent (from PLN 4 to PLN 4.44). Therefore, these two factors account for only 2/3 of the current gasoline price increase.

"The remaining 1/3 these the effect of other factors. The most important of these which contribute to the additional increase in fuel prices globally, including increased demand for travel (by car and by air), limited capacity of refineries that are not able to meet the growing demand, and restrictions on exports of finished fuel by China, which wants to reduce the carbon intensity of its economy in this way. These factors have already pushed up the price of gasoline, and it's not over yet, as the vacations in the northern hemisphere are just beginning," the analyst added.


crude oil
paweł majtkowski

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