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Liquid fuel market

LIQUID FUELS, INCLUDING DIESEL OIL

The year 2020 was the first one in a long while when one could observe a drop in liquid fuels consumption – this has been confirmed by the latest market research prepared by POPHiN. The main reason behind the lower consumption were the effects of the COVID-19 pandemic, which started in March 2020 – primarily limitations related to movement and remote work, and restrictions imposed by the government. After the good for the fuel sector Q1 2020 the struggle with the effects of the pandemic in Poland began. Double digit drops in sales in the first months of the epidemic restrictions being in force had an impact on the annual results, especially, as after several better months, when it seemed that the demand for fuels (during the holidays in particular) was growing, again, at the end of Q3 2020 the pandemic grew in its intensity, limiting the interest in liquid fuels. The least impacted was diesel oil – limitations in using vehicles powered with this fuel were lower. The lorry transport – the main customer of diesel – operated rather normally, construction and infrastructural investments were being continued, the economy required supplies of goods and resources (source: POPHiN). In 2020 the consumption of liquid fuels in Poland amounted to 31.3 million m3 and was up by 4.4% compared to 2019. The consumption of petrols amounted to 6.0 million m3 (down by 8.5% yoy), and the consumption of diesel amounted to PLN 20.7 million  (down by 1.3% yoy). Limitations in the consumption of fuels driven by the pandemic translated also into a reduced necessity to supplement the domestic market with the supplies from outside Poland. Reduced needs of the internal market were to a larger extent satisfied by the domestic production. However, also in these unconventional conditions the supplementary import of products was necessary, yet in a reduced extent than in the previous year. The import of diesel oil reached the level of 5.3 million m3, which means a share in the total consumption at the level of 25%. The import was lower by 6% yoy (source: POPiHN).

BIO-FUELS

In 2020, similarly to previous years, under the law on liquid biocomponents and bio-fuels all entities that produce fuels and import them from abroad were obliged to fulfil the National Indicative Target (NIT). The level of NIT for 2020 amounted to 8.5% by calorific value, in 2019 this level amounted to 8.0%, in 2018 to 7.5%, and in 2017 to 7.1% by calorific value.

The substitution fee mechanism was also valid in 2020. According to it the entity that fulfils the NIT, which has documented the fulfilment of this obligation at the specified minimum level of the NIT established for the given calendar year, can pay the substitution fee. The entities entitled to the substitution fee are the ones which have fulfilled at least 85% of the obligation level under the law.

In connection with various regulations becoming effective since 2017 one can observe a drop in the amount of produced liquid bio-fuels (B100). Within the first three quarters of 2020 there was a drop in the production of methyl esters (the biocomponent that complies with the sustainable development criteria, which does not entitle to its double inclusion into the NIT fulfilment) – from 659.1 thousand tonnes in the period Q1-Q3 2019 to 656.1 thousand tonnes in the period Q1-Q3 2020 (source: KOWR).

PETROL STATIONS

At the end of 2020 there were over 7.7 thousand of petrol stations functioning on the domestic market. Similarly to previous years about a half of them were the facilities of independent operators, 30% of the stations were operating in the chain of domestic concerns, and 20.3% of foreign concerns. The development of the chains owned by concerns occurred through the development of own and franchise stations (source: POPiHN).

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