Fuels are now cheaper in the Czech Republic, but this is apparently just the “calm before the storm”. Professional oil traders agree that the market underestimates the impact of the post-covid opening of the Chinese economy in particular on the world prices of the strategic raw material, and therefore also on the prices of fuel in countries such as the Czech Republic. In addition, Russia is still preparing its response to the Western embargo and price capping of its oil and oil products. If it responded by significantly limiting oil production, its price on world markets could rise significantly. Which would again make fuel more expensive in the Czech Republic.
However, according to a number of experts, the price of oil will rise dramatically only and only on the basis of the aforementioned post-covid opening of the Chinese and Asian economies. China is the world’s largest oil importer. “I believe that oil will rise above $140 per barrel once the Asian economies fully recover after covid, unless there are further lockdowns,” he told the agency Bloomberg commodity trader and hedge fund manager Pierre Andurand. The American bank Goldman Sachs, in turn, assumes that oil could rise to $110 per barrel by this summer. Again due to the fact that Asian economies, led by China, will get rid of covid restrictions.
Jan Frait from the CNB: Inflation in January will be a shock, but not 20 percent. I would not expect lower rates this year
Since July, Jan Frait has been a member of the CNB banking board for the second time. He first joined it for a six-year term in 2000. This February, he will become vice-governor. “We live in a time of inflationary shock,” says Frait. According to him, there is no optimal solution to quickly turn around the rise in prices. There are a lot of influences, for example, energy prices are now completely unpredictable. “We don’t have classic inflation where more or less everything grows.” According to him, the Czechia will fall into a moderate recession of about one percent this year. Still, he says, there is no reason “for catastrophic scenarios of a sharp drop in production or a sharp increase in unemployment.”
A liter of gasoline for fifty? It is not out of the question
Just raising the price of oil to $110 per barrel would bring fuel prices in the Czech Republic back above the level of 40 crowns per liter. An oil price of $140 per barrel would bring their price closer to 50 crowns per liter. After all, oil did not rise to the level of $140 per barrel even during its extreme price increase immediately after last year’s Russian invasion of Ukraine. The price of Brent oil then stopped just below the level of 140 dollars per barrel, from which it quickly fell. However, it was enough for diesel to be sold in the Czech Republic for around 50 crowns per liter.
In the next seven days, however, the development of fuel prices in the Czech Republic will follow the development of the past week. Gasoline will be cheaper by 30 pennies per liter, diesel by up to 50 pennies per liter. However, the decline in fuel prices in the Czech Republic will stop by the end of January. They are now even cheaper due to the drop in oil prices on world markets and due to the strengthening of the koruna against the dollar. However, the drop in oil prices will stop due to the opening of Asian economies and the partially related return of a more optimistic mood to the world financial and stock markets, which also encourages demand for oil and fuels.
Retail sales fall for seven months in a row, Czechs don’t want to spend
Retail sales in the Czech Republic have been falling year-on-year for seven months in a row. In November last year, the decline slowed to 8.7 percent from October’s 9.9 percent. Sales increased only in stores with cosmetic and toilet products. This follows from the revised data of the Czech Statistical Office (ČSÚ). In a month-on-month comparison, sales decreased by 0.3 percent.
