• Due to soaring prices and incoming complaints, the President of UOKiK carefully analysed the situation on the fuel market.
• The study showed that the increase in fuel prices in Poland, as in other European countries, has market foundations – there are no grounds to conclude that it may result from prohibited practices of entrepreneurs.

Russia’s invasion of Ukraine and the sanctions imposed on the aggressor by European countries have affected the listings of raw materials and caused market disturbances. The current exceptional situation directly affects the energy markets and causes prices of energy raw materials to increase significantly. The President of UOKiK has taken steps to clarify the reasons for such a large increase in prices - whether, in addition to market conditions, potential anti-competitive behaviour may have affected this.

Situation in Poland and Europe

According to the analyses of the President of UOKiK, the increase in fuel prices in recent months in Poland results from objective market factors. The most important of them include the following:

• decrease in the capacity of refineries operating in Europe. This is due, inter alia, to the closure of some of them in recent years due to the limited prospects of the industry (expected drop in petrol consumption due to the shift to electric cars) and short-term problems (significant decrease in fuel demand in the first pandemic period);
• an increase in oil prices and the US dollar exchange rate (in relation to PLN) in which it is valued;
• China’s significant reduction in fuel exports in 2022;
• sanctions against Russia, which is a significant exporter of both crude oil and finished fuels, including petrol.

According to UOKiK’s analysis, the problem of high fuel prices caused by the global situation and market factors is not only faced by Poland, but also by other European countries. This applies not only to oil prices, but also to petroleum products, i.e. petrol and diesel.

Both the increase in fuel prices and the growing difference between oil and petroleum products in H1 2022 were a global phenomenon. The graph shows the convergence between the dynamics of wholesale fuel prices in Poland and fuel quotations in Europe - which has a direct impact on retail prices at petrol stations - indicates the decisive influence of external factors in the process of price formation on the domestic market.

Actions of the President of UOKiK

The external reasons for the increase in fuel prices were confirmed by the UOKiK’s analysis. The President of UOKiK asked PKN Orlen and Lotos Group for information concerning their sales policy in the period from January 2021. Then we calculated the method of calculating wholesale and retail prices of fuels by entrepreneurs, including the factors taken into account in determining the sales price, its components, along with the determination of shares in the final price and price formulas used by companies. In addition, information on how to calculate the so-called model refinery margins was examined. The results of this analysis show that the change in prices is due to the previously indicated situation on the world fuel markets.

Similarly, it is in line with the increase in model refinery margins. It should first be stressed that they do not fully reflect the actual profit achieved by refineries. These are highly simplified indicators for estimating the profitability of crude oil processing. In short, they imply differences between the price of oil and fuels on the international market.

- Our analysis showed that fuel prices in Poland are closely linked to the European market and macroeconomic situation. We will continue to monitor the market and we will examine thoroughly any sign indicating the possibility of anti-competitive practices in this market. As an antitrust office, however, we do not have a direct impact on the level of prices applied by entrepreneurs - says the President of UOKiK Tomasz Chróstny.

The prices of products in a free market economy are determined directly by businesses as part of exercising the freedom to conduct business activity. The President of UOKiK may intervene only in strictly specified cases, e.g. if prices are the result of abuse of a dominant position by major players on the relevant market or an illegal arrangement between operators, e.g. a market allocation scheme or price fixing. In such cases, UOKiK still does not set the prices and can only have an indirect impact on them, i.e. by eliminating illegal practices and improving competition on the relevant market.

Moreover, even the collection of high prices by a parent undertaking is not prohibited under antitrust legislation. This is confirmed by the court’s ruling on the 2000 decision. At the time, the President of UOKiK found that PKN Orlen had set the sales prices of petrol and diesel in a way that allowed it to achieve unjustified benefits. The entrepreneur appealed to the court which annulled the decision, stating, inter alia, that fuel price calculations based on objective and subjective factors and referring to prices on world markets - fully competitive - are equal to other types of calculations, e.g. based on the cost of production. This stance was shared in 2003 by the Supreme Court.

Proposed solutions in other countries

The problem of rising fuel prices affects the entire European market and is the subject of analyses carried out by national anti-monopoly authorities, including Austria, Germany and Greece. It should be stressed that their initial conclusions do not deviate from the findings concerning the Polish market, indicating that the increase in fuel prices results mainly from factors beyond national markets, as well as from the inability to cause price reductions by means of tools available to national antitrust authorities.

In many countries, the problem of current price increases, including in the fuel market, is solved through economic policy instruments such as tax reductions. Also in Poland, the government temporarily reduced VAT on fuels from 23 to 8% and reduced the excise duty on certain motor fuels. In addition, some European countries have introduced or are considering introducing special windfall taxes on short-term, high profits for fuel and energy companies. This is already the case in Italy, the United Kingdom and Romania, among others.

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
E-mail: biuroprasowe@uokik.gov.pl
Twitter: @UOKiKgovPL