Despite oil price hikes, fuel prices at Polish service stations are still among the lowest in Europe. Cheaper PB 95 gasoline can only be bought in Romania, Turkey, Bulgaria, and Kosovo. The same holds true for taxes included in the price of fuels. Only in Bulgaria, Romania and Luxembourg the VAT and excise taxes account for a smaller portion of the price of gasoline.
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For instance, in Lithuania, Latvia, Estonia, Slovenia, Slovakia, Hungary and the Czech Republic taxes represent a larger portion of the gasoline price than in Poland. Countries where taxes account for a lion’s share in the price of gasoline include the Netherlands, Greece, Italy, France, the United Kingdom, and Germany.
Between March 31st 2016 and May 15th 2018, the Brent crude price in US dollars doubled. It the last 12 months alone it rose by 61%, and by 18% since the beginning of the year. Growing global oil prices push up the price of fuels at service stations also in Poland, even though no changes have been made to the taxes.
The reason behind the increase in fuel prices, which started several months ago, is the unrest in the Middle East. Another factor contributing to the oil price surge was President Trump’s decision made last week to withdraw the United States from the Iran deal, which lifted the embargo on trading in Iranian oil in exchange for Tehran’s giving up its nuclear programme. On Tuesday, at the close of trading on the London Stock Exchange, a barrel of Brent crude was priced at USD 78.4, almost USD 12 more than at the beginning of April.
Almost all crude oil used in fuel production in Poland is imported. The US dollar exchange rate is the driver behind the oil price – oil procurement costs go up when the dollar strengthens against the złoty. The US dollar is the main currency used in settlements between oil companies and has been on the rise. On Wednesday, the USD/PLN exchange rate was USD 1 = PLN 3.62, up by 25 grosz on the previous month (based on the exchange rate announced by the National Bank of Poland).