Keeping fuel prices in check at the expense of margins. Is history repeating itself?

– Orlen will use the tools available to it, including – I would say – financial tools, for example those related to the margin, so that possible spikes in oil prices on world stock exchanges do not have a massive and very irritating impact on fuel prices in Poland – said Prime Minister Donald Tusk at a press conference on Monday.

After this statement, Orlen’s quotations immediately fell by 4.8% on the Warsaw Stock Exchange (WSE).

Poland does not import fuel through the Strait of Hormuz

The Prime Minister emphasized that Poland has no problem with fuel supplies, and the war in the Middle East does not have a direct impact on oil and fuel supplies to the country. The inventory system fill level is currently over 73%. – that’s 3 million m3 of oil.

– Orlen’s announcement (…) is absolutely clear – it concerns both the safety of the routes through which oil flows to Poland and Orlen, and it is not the Strait of Hormuz, so there is no problem in this case. Orlen has not and does not import any oil through the Strait of Hormuz, and of course it does not import oil from Iran. The entire structure of oil supplies to Orlen and Poland is completely safe at the moment and there is no question of any, even the slightest, disruptions, explained Donald Tusk.

Experts show the scale of opportunities to reduce fuel prices

According to Dawid Czopek, raw material market analyst and Polaris FIZ expert, the real possibilities of price reductions by the state-owned company are small.

– Orlen may reduce the margin because it had quite high margins, but let’s remember one thing: former president Daniel Obajtek tried to pay market prices and ended up running out of fuel. Orlen can reduce prices by about 20-30 cents per liter, but that’s all. The government has greater opportunities because it can reduce taxes and excise duties. Orlen cannot reduce its refining margin either, because there will be a shortage of fuel, said Dawid Czopek in money.pl.

Jakub Wiech, energy expert, head of the Energetyka24 website, also curbs appetite: – Pwe are moving on very muddy ground. A commercial law company like Orlen has its priorities towards other shareholders. It is obliged to act in accordance with, for example, the Commercial Companies Code, so it is difficult for me to indicate what Orlen can do in response to such an – after all – political – order – he points out.

Will the history of fuel price reductions repeat itself again?

“The most shocking fact is that fuel prices are reaching absolutely record levels despite the abolition of VAT, and Orlen and Lotos are recording the highest profits in history” – these are Donald Tusk’s words from June 2022, when he was not prime minister. As he said then in an interview with natemat.pl, the margin of Orlen and Lotos must be reduced immediately. In June 2022, the price per barrel of oil was approximately $110-120. When asked how much petrol would cost the day after he took over as prime minister, he replied PLN 5.19 per liter.

In April 2024, almost a year after becoming prime minister, Donald Tusk explained: “I am not responsible for gasoline prices, it is not the prime minister’s decision.”

Currently, Brent oil prices are approaching $85 per barrel – for the first time since July 2024. Some analysts predict that the price will well exceed $100 with a long-term closure of the Strait of Hormuz.