The year 2021 is a period of recovery from the effects of the initial phase of the COVID-19 pandemic also in the liquid fuels market, and at the same time – a year of very clear, dynamic increases in liquid fuel prices.
The year 2021 brought many challenges to the oil and fuel industry. While the first half of the year was fairly stable, the biggest challenges emerged in the second half. Both the economy as a whole and individual companies had already learned to function in pandemic conditions, but the second half of the year was definitely dominated by a drastic increase in commodity prices.
With gas becoming more expensive, oil began to be considered as an alternative fuel for power plants, thus creating additional demand in the oil market, which further pushed up prices. At the same time, OPEC did not increase production, and the COVID-19 pandemic, which was exposed more strongly from time to time, further sustained the increases. The increase in diesel prices was also influenced by market speculation on natural gas (uncertainty about Nord Stream 2), as well as increased demand for natural gas as a result of the shift away from coal.
Prices in November returned to levels not seen for a long time above USD 80 per barrel WTI. More expensive oil translated into higher prices at fuel stations. At the beginning of the year, we paid less than 5 PLN per litre of petrol 95. In February, prices went up and continued to rise for the rest of the year. (source: polskieradio24.pl)
Throughout 2021, the consumption of liquid fuels in Poland, including diesel – increased significantly year on year. A particularly significant increase in fuel sales in the Polish market was observed during the holiday period, when the vast majority of Poles chose to leave the country. People were travelling more, despite permanently rising fuel prices.
The recovery of the economy after the restrictions caused by the pandemic and Poles recovering from periods of reduced mobility, led to increased sales of all types of liquid fuels except heavy fuel oil. In 2021, demand for motor gasoline increased much more than demand for autogas, due to a much higher increase in the price of autogas than petrol 95 and complications with its foreign purchases following the sanctions imposed on Belarus. Demand for diesel increased slightly less. Truck transport – the main consumer of diesel – was operating robustly, as construction and infrastructure investments were underway, the growing economy required greater supplies of goods and raw materials. Jet fuel market was the slowest to recover, although flights are increasing in both European and global space. Passenger and cargo connections are increasing over time, but it will take a long time to return to pre-pandemic status .
In 2021, the consumption of liquid fuels in Poland amounted to 33.3 million m3 and was up by 7.1% against 2020. Petrol consumption amounted to 6.6m m3 (up by 9.5% y/y) and diesel 22.0m m3 (up by 7.0% y/y).
In 2021, rising prices slowed the growth in demand for biofuels, but according to the International Energy Agency (IEA) report ‘Renewables 2021. “Analysis and forecast to 2026’, 2021 demand will be comparable to the 2020 demand recorded during the Covid-19 crisis[1].
Some countries including Brazil, Argentina, Colombia and Indonesia are managing rising costs of resources and bio-fuels by temporarily reducing or delaying the obligation to blend bio-fuels with petroleum-based fuels. These actions could reduce demand by 3%, or 5 billion litres in 2021. By August 2021, bio-fuel prices had increased by 70-150% in the US, Europe, Brazil and Indonesia, depending on the market and fuel, from 2019 average prices. In comparison, crude oil prices had increased by around 40% over the same period[2]. For the full year 2021, FAME (Fatty Acid Methyl Esters) increased by 89%[3], and diesel by 58%[4].
Although overall demand for biofuels is returning to 2019 levels, even with slower growth, the recovery is uneven in the use of biocomponents for petrol and diesel. Rising energy efficiency and electric vehicle sales, as well as behavioural changes, are contributing to lower demand for biocomponents[5].
[1] Source: www.iea.org
[2] Source: www.iea.org
[3] Source: Platts
[4] Source: bankier.pl
[5] Source: www.iea.org
At the end of 2021, there were over 7.7 thousand petrol stations operating in the domestic fuel market. As in previous years, ca. 45% of petrol stations were facilities of non-associated operators, 30.0% of petrol stations operated within the networks of domestic concerns and 20% of foreign concerns. The network of concern stations was developed through expansion, both by own stations and franchised stations. In the segment of unaffiliated operators, 2021 was a year with virtually no changes. There were significant changes in the area of operations of domestic and foreign concerns, but also of independent operators, where 2021 was a year of dynamic changes. According to data by POPIHN, the number of stations among all operators increased by 113 new locations. The greatest quantitative changes occurred among the AVIA UNIMOT and MOYA chains, where the number of stations increased by several dozen new sites. In relation to the previous year, it is also worth mentioning that the segment of stations belonging to market shops is shrinking, as the TESCO network which operated over 20 stations disappeared from the market. Some of these sites have already been taken over by other operators, and work is underway to change the operator of the remaining sites[1].
The year 2021 brought many challenges related to the ongoing pandemic. On the other hand, there was a significant recovery in terms of fuel demand at stations. There were also noticeable increases in sales of convenience products and foodservice, which in the context of 2020 was a noticeable change and shows that the market is slowly returning to pre-pandemic levels. Dynamic growth was also recorded in the area of electric car chargers, according to data by POPIHN the number of chargers increased from 1364 in 2020 to 1932 in 2021. Everything indicates that the coming years will bring systematic and dynamic development of electromobility in Poland, which will also be facilitated by investment subsidies in this area.
[1] Source: POPiHN
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