There is a chance that it will not happen. The CPN (Lower Fuel Prices) package has already removed the lower fuel excise tax. The government made this decision at the end of last week. From Tuesday, June 16, the CPN package only applies a reduced VAT rate from 23% to 8% and regulates maximum fuel prices at stations. Despite this change, fuel prices did not shoot up. What will happen when the entire CPN package is abolished? It will happen in less than two weeks. The government decided that the “shield” introduced at the end of March will only be in effect until the end of June.
Will fuel prices shoot up?
Recall that the government decided to introduce the CPN package after fuel prices at Polish stations began to rise significantly. Diesel reached 8.69 PLN per liter in March, and gasoline was almost 8 PLN. These were the consequences of what happened in the Middle East. On February 28, the United States and Israel decided to attack Iran. In retaliation, the Iranians, among other things, blocked the Strait of Hormuz, through which about 20% of global oil demand and about 30% of gas flowed.
According to analysts, abolishing the CPN package does not necessarily mean that fuel prices will return to pre-regulation levels. They emphasize that drivers may not notice the difference in practice. However, everything depends on several factors.
“The chances of calming the situation are high. A peace memorandum between the United States and Iran has been signed, and we have a 60‑day period for further negotiations” – said Urszula Cieślak from Reflex, quoted by TVN24.
Experts note that if the CPN package were to cease today, it could lead to a price increase of about 70 groszy per liter. By the end of June, any increases would likely be between 20 and 30 groszy. Ultimately, it will depend on what happens in the Middle East.
Oil prices on global markets fall
Whether prices will rise largely depends on the policy adopted by the Polish oil giant, Orlen. The Płock refinery has recently lowered wholesale fuel prices, but will it do the same by the end of June? Orlen may adopt the strategy it used at the end of 2022. At that time it did not lower wholesale prices to hide the VAT increase from 8% to 23%. In early 2023, it lowered wholesale prices, and drivers hardly noticed the difference. It is possible that this maneuver will be used again.
For now, as experts point out, falling prices on global markets give hope that fuel prices will not rise even if the CPN package is abolished. On Friday afternoon, a ton of diesel on the London ICE exchange cost $888, almost $200 less than earlier in the month. Although it is still more than before the Middle East conflict, when a ton cost about $750, a clear decline is visible. This is also noticeable for Brent crude. The price per barrel fell from over $100 a month ago to $80.
There are no such significant drops for gasoline. The good news is that the price in this case is not rising. It stays at a similar level. A gallon on the New York commodity exchange costs $2.98. The level around $3 per gallon has been maintained for several weeks.
See also: Orlen shares after a gigantic move! The company reaches for millions of barrels of oil
