“The situation on the global fuel markets is unusual, because for the first time in several decades the demand for fuels (mainly diesel) exceeds the available refining capacity. the emergence of new risk factors – the fear of a fuel shortage – has a greater bearing on prices“- observed the chief economist of PKN Orlen Adam Czyżewski, questioned by the PAP on the reasons for the sudden increases in fuel prices in the stations.
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He added that the availability of finished fuels in global markets is limited, although refineries are “at full capacity”. “The diesel shortage is particularly acute, as the additional demand for this fuel is generated by the energy sector. The available installations generating heat and electricity, powered by diesel and fuel oil, alleviate the energy shortage caused by the lack of natural gas “- said Czyżewski.
In his view, the pressure on rising fuel prices is intensified by the escalation of military operations: the sabotage of the NS1 and NS2 pipelines, the disruption of the road to Crimea, the Russian missile attacks on Ukrainian cities and the weakening of the zloty against the US dollar.
“There is no fuel, there is too much oil”
“The decision of OPEC +, which reduces oil exports, which has raised oil prices on the markets, has an impact on the current situation” – noted Czyżewski. However, he noticed it the situation on the oil market is completely different from that on the fuel markets.
“There is a shortage of fuel, while there is an abundance of oil and the OPEC + decision is proof of this. Limiting oil exports is intended to prevent oil prices from falling further” – the chief noted. economist from Orlen.
See also: Two dangerous phenomena in the oil market together. Prices at stations will approach records
According to him, to what extent fuel prices will rise in the near future at wholesale and service stations in the short term depends on the demand in the world and in Europe. However, he added that fuel demand was changing under the influence of both fuel prices and various war-related risk factors.
“According to the projection of the International Monetary Fund and the World Bank half of the world’s population is already feeling the effects of the recessionwhich will certainly result in a reduction in fuel demand “- Czyżewski informed.
Worse with diesel than with petrol
He stressed that in the case of gasoline, for which demand in the winter season in the Northern Hemisphere tends to decline, we can count on a halt in price increases and even falls. “At the moment, however, the demand for diesel is highly dependent on the energy sector (replacement of natural gas and coal) and will be strong in the winter season.” – he added.
When asked by PAP about what could help calm the situation on the fuel market, economist PKN Orlen stressed that it was first necessary to increase the supply of fuels from the new refineries currently under construction in the Middle East, Africa and Asia. “These refineries will start supplying fuel to global markets starting in the middle of next year. So the global refining industry will have the necessary reserves, which are currently lacking, and fuel prices will decrease in relation to oil prices,” Czyżewski said. .
He noted, however, that oil prices are now in the “hands” of the OPEC + cartel, keen to keep them high.
“The good news is that high oil prices mobilize production in both the United States and Canada and permanently reduce the demand for this commodity, replacing it where possible with alternative fuels and improving energy efficiency.“- observed Czyżewski. He admitted that in a short time the prices could decrease in response to the lower geopolitical risk and because of the warmer winter, when there is less demand for diesel from the energy sector”. on a global scale, with high prices compared to what is currently assumed “- he added.
Orlen has no influence on the market situation
Asked by PAP whether PKN Orlen is planning measures to limit the magnitude of the fuel price increases, Adam Czyżewski replied: we have no influence on the situation of global markets, on which our wholesale prices depend on import parity.
“We have no influence on the rising costs of biocomponents and the energy required for fuel production and distribution. However, we do have an impact in ensuring the continuity of fuel supplies, so we reduce the risk of increased purchases due to the fear that the fuel will run out “- he said.
He added it Orlen also has the ability to reduce retail price fluctuations in relation to changes in fuel prices on global markets.
“When it comes to petrol stations in Poland, it is worth remembering that, despite being influenced by the same global factors, for 14 weeks the fuel prices in Polish stations were at the lowest level in the entire European Union” – he said. Czyżewski.
The Orlen economist also referred to PAP’s question as to whether concerns about the fuel deficit in Europe will contribute to further price increases for these products.
“We have entered a period of high volatility in oil and fuel prices due to insufficient reserves. Until the reserves are rebuilt, which requires considerable investment and time, there will be significant fluctuations. RFuel reserves are expected to grow as early as the middle of next year, with new refineries appearing on the market“- noted Czyżewski.
At the same time, he admitted that it is difficult to say what will happen with oil reserves in the near future. “The OPEC + countries, by limiting oil exports, are increasing their reserves. The question is whether they will be ready to use them and under what conditions” – said Adam Czyżewski.
