Hungary’s MOL refining margins rose unprecedentedly in March, roughly tenfold, according to Bloomberg.
While the company’s refining margin was $ 3.40 a barrel in February, it was $ 33.70 a barrel last month. The extraordinary increase in margins is mainly due to the fact that MOL continues to take Russian Ural oil. Due to sanctions, the West finds itself in a unique discount.
For example, traders offered Russian Ural oil to Indian customers at the end of March at a discount of about $ 45, compared to the price of Brent oil, which at the time cost about $ 110 a barrel. Even in the first half of March, the discount of the Urals compared to Brent was milder, amounting to only about twenty dollars per barrel.
MOL’s margins are growing at an unprecedented rate
MOL operates four refineries and two petrochemical plants within integrated supply chain management in Hungary, Slovakia and Croatia. It operates 304 filling stations in the Czech Republic, making it the second largest operator in the country.
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MOL’s extraordinary refining margin is at least partially right for those who pointed out during the record increase in fuel prices in the Czech Republic during March this year, which is largely the result of the margin policy of refineries, fuel distributors and service stations themselves. In response to this criticism, the government of Prime Minister Petr Fiala began to control the margins of gas stations. It compares them with the prices set on the Rotterdam Stock Exchange. According to them, government officials have not yet revealed any significant – ie widespread and systemic – deviations of margins from the current standard.
However, MOL’s historically high refining margins signal that, at least in part, domestic motorists and carriers paid very little for fuel in March than would correspond to real costs and current margins.
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By Fial’s government focused only on comparing gas station margins with prices on the Rotterdam Stock Exchange, focusing only on part of the complex issue. So it can be said that to a large extent “she was heading next door”. If it were to take the issue more comprehensively and analyze the pricing and margin policy of MOL-type companies, covering the entire supply chain, from refineries to service stations, it would clearly have to come to a different conclusion.
Shares of MOL rose relatively sharply on the Budapest Stock Exchange during March, by almost twenty percent. This shows that investors are well aware of the enormous profitability of the current margin policy of Hungarian society.
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