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Inflation in Poland. Fuel prices – promotions for inflation-neutral refueling, mBank economists explain

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Inflation in Poland remains at double-digit levels. In the coming days, holiday fueling promotions will come into force, which, however, will not be taken into account by the Central Statistical Office (GUS) when calculating the price change index. mBank’s economists indicated the reason.

WITH data from the Central Statistical Office it follows that inflation in May 2023 it amounted to 13% year on year. Compared to the previous month, prices remained at the same level. For comparison, in April the increase in the prices of goods and services amounted to 14.7% on an annual basis.

Detailed data from the Central Statistical Office show that last month fuel for private means of transport became cheaper by an average of 9.5 percent over the course of the year. Diesel prices fell by 15.3%, petrol by 5.1%, and liquid gas and other fuels for private means of transport fell by 17.9%.

Read also: Good information for drivers. There are announcements of other large fuel networks

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Inflation and refueling promotions

In recent days, the largest fuel chains in Poland – including Orlen, BP Polska and Circle K – announced the introduction of holiday promotions for refueling. In some cases, drivers will be able to receive a fuel discount of up to PLN 0.40 per litre. Most of the promotions are to take effect from next Friday, June 30. It would seem that this will lead to a deeper decline in fuel inflation in the Central Statistical Office data.

However, as mBank economists explain, this will not happen. “Reductions fuel prices promised by the main chains of stations do not mean reductions in the reported fuel inflation. This is related to the fact that discounts are not common, but are limited only to participants of loyalty programs “- they pointed out. Meanwhile – as they pointed out – the Central Statistical Office takes prices “from pylons”.

“Let us add, however, that the perspective of people entitled to discounts will be quite different. And there may be quite a lot of them. Price reductions are a movement ‘along’ the demand curve, and thus an impulse increasing the aggregate, real demand in the economy,” mBank’s economists added.

In the study of changes in the prices of consumer goods and services by the Central Statistical Office, pollsters help, but also administrators, e.g. in the field of fuel prices for private means of transport.

This Friday we will get preliminary inflation data for June 2023.


Main photo source: Jacek Turczyk/PAP

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