In the next seven days, the discounting of fuel should be more significant, in the range of around 50 pennies per liter. For example, the crown price of a ton of wholesale diesel on the commodity exchange in Rotterdam now corresponds to the level of 19,300 crowns.
The last time it cost that much, at the end of July this year, diesel was sold in the Czech Republic for only about 33 crowns per liter. Even if we take into account the increase in the consumption tax on diesel, which took place on August 1, which after including VAT raised the price of diesel by CZK 1.80/l, there is still significant room for a gradual reduction in diesel prices (and also gasoline, auto note)up to a few crowns per liter.
The reason for the drop in Brent crude oil prices, which fell below $80 per barrel for the first time since July on Wednesday, is due to weaker economic data from China, the world’s largest oil importer. Oil traders are worried about weaker demand for the raw material. At the same time, their fears about the expansion of the conflict between Israel and Hamas are decreasing.
The markets originally calculated on a more vigorous retaliation by Israel, in the form of a large-scale ground invasion of Gaza, which has not yet taken place. This helps reduce the price of fuel in the Czech Republic. And this despite the fact that the koruna still remains relatively weak against the dollar.
The author is the Chief Economist of Trinity Bank