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Consequences of Increased Excise Duty on Diesel and Potential Stabilization of Diesel and Gasoline Prices

The government wants to push through an increase in excise duty on diesel by 1.5 crowns per liter. For the bill to be valid, it must be approved by the Senate and signed by the President. What possible consequences do you expect?

VAT must be added to this. You can expect only one thing, and that is an immediate increase in price. I expect a jump in prices by two crowns. An almost end customer like us – a gas station – buys fuel including consumption tax or VAT. We have no chance to do anything about it at all. On the other hand, even after the increase, the prices will remain similar to those in the surrounding states, we will remain competitive. Today, the difference between prices in the Czech Republic and Germany can be three or more crowns. The question is whether it is worth it for the Germans to go to the Czech Republic to refuel, if the difference is one crown.

At what levels can diesel and gasoline prices stabilize in the coming weeks?

Natural 95 now costs 35.5 crowns here, we have diesel for 30.5 crowns. I expect that during July and August, gasoline and diesel will become more expensive by about one crown. Add to that the consumption tax, which the state intends to re-introduce. If prices continue to develop according to the usual cycle, we can expect a slight discount in September, and then an increase in the price of diesel in winter. This is an annual classic unless affected by extreme fluctuations. We do not change our margin, we keep it at about seventy shillings per liter in the long term.

Currently, however, the prices are very low. Are you selling more?

Yes, it can be seen mainly in the border area. The outflow rises near the Polish, but mainly the German and Austrian borders. Germans, Austrians and Poles, who are close by, come to us to refuel, they have it cheaper than at home. The situation has turned around. At the same time, many Czechs who go on vacation fill up a full tank before leaving the Czech Republic, or even in canisters. Inland, we sell more or less the same amount. Carriers also respond to lower prices and shop more often in the Czech Republic, on the other hand, they travel less during the holidays.

How different are individual pumps’ approaches to pricing now?

Not all stations reduce prices. You typically pay extra on highways, even in today’s low prices, on the other hand, prices are often low in shopping centers. When there is our pump or a mall pump in the region, others are forced to come closer to us in price. But it is still true that many people drive in the Czech Republic who do not care how much they pay.

How do you explain the current low prices?

In addition to other reasons, I think it is also the demand for transport. It’s still not what it was before the pandemic. This also pushes prices down, and of course not only in our country, but in the whole of Europe. But the main thing is the policy of the refineries, they have the key and they follow it. It’s not like twenty years ago we were haggling over prices. Bargaining like some grocers does not exist. The days when we had to bid on the price and every day we searched for fuel and imported it from abroad are over.

2023-07-13 15:40:00
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