Motorists from the Czech Republic have been flocking to Poland to take advantage of low fuel prices ahead of elections, in what the Czech media have dubbed “petrol tourism”.
Given that global crude oil prices have been rising and the zloty has been weakening, analysts believe that Polish state energy giant Orlen – which is the dominant player on the market – has been artificially lowering prices at petrol stations to help the ruling party win re-election next month. The company denies the accusation.
Czech news outlet CNN Prima reported this week that many Czech drivers are going to Polish petrol stations across the border. Some are not only filling up their tanks but also taking petrol in cans back home, where fuel prices have been rising.
Over the past month, the price of a benchmark American WTI crude oil barrel has risen by more than 11% to $88.78. By contrast, the price of unleaded 95 petrol fell 8% from 6.70 zloty (€1.45) per litre on 6 September to just over 6.10 zloty (€1.32) on 20 September.
Over the same period of time, the average price of the same fuel in the Czech Republic, where Orlen is also the largest player on the market, rose from 40.81 korunas (€1.67) to 41.25 korunas (€1.69).
Since the middle of this year, diesel prices have fallen 2% in Poland while rising in Europe by 42%, according to analytical service Polityka Insight, which reports – citing unnamed sources – that Orlen has been using emergency fuel stocks to balance the market for at least the last few weeks.
Those reserves can be used in case of supply disruptions in the domestic market, such as a war or failure of critical infrastructure. Their use, however, must be authorised by the climate ministry.
“Orlen’s actions are intended to keep fuel prices low until election day. They are being coordinated with the government, which wants to reduce the risk of public discontent related to increases in prices and also to create the possibility of declaring a ‘victory’ over inflation,” said Polityka Insight.
“This is expected to help [the ruling] Law and Justice [party] win the elections,” said Polityka Insight, adding that it expects a rapid rise in fuel prices after the elections.
PI PREMIUM: Orlen korzysta ze strategicznych rezerw paliw, by utrzymać niski poziom cen na stacjach. Ma to ograniczyć inflację i wspomóc PiS w wyborach. Przeczytaj całą analizę (poza paywallem): https://t.co/ne8EDCyO3J. pic.twitter.com/ktFSIdVVHc
— Polityka Insight (@PolitykaInsight) September 19, 2023
According to analysts at mBank, lower fuel prices might help to reduce inflation to 7% in October, 1.6 percentage points lower than it would be if prices followed European trends.
Citing fuel market specialists, it says that the price of a litre of diesel in Poland should currently be 7.4 zloty, whereas it is in fact 6.05 zloty.
Koledzy z branży paliwowej dysponują wiedzą, na którą jest ostatnio spory popyt. Niektórzy z nich twierdzą, że gdyby historyczne relacje były zachowane, cena oleju napędowego wynosiłaby 7,40 za litr. Scenariusz inflacyjny dla września i października wyglądałby tak 👇
— mBank Research (@mbank_research) September 19, 2023
In statements issued to financial news service Money.pl, both the climate ministry and Orlen denied Polityka Insight’s claims. In a further statement sent to the Fakt newspaper, Orlen said that prices at the pump are influenced by various factors.
“Fuel prices in individual markets and in the offerings of specific suppliers are influenced by, among other things, fuel sourcing, raw material costs, fiscal burdens and production and service costs, including energy, logistics and labour costs,” the company said.
Orlen – whose CEO, Daniel Obajtek, has close ties to the ruling party – was already accused of price manipulation at the beginning of this year, claims it also denied at the time.
In March this year, Obajtek declared that “of course I want Law and Justice to win [this year’s elections], I make no secret of that”. He has personally donated to the party’s election campaign.
The majority of the large campaign donations received by the ruling party have come from senior managers at state-owned firms.
Opposition party PO has received donations primarily from private business leaders, in particular at gaming giant CD Projekt https://t.co/a90UkM5PnL
— Notes from Poland 🇵🇱 (@notesfrompoland) August 21, 2023
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Main image credit: Orlen press materials
Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.