The billions of zlotys that Orlen generates in the form of net profit are made up of Poles at gas stations – said Janusz Steinhoff, former Minister of Economy, in “Rozmowie Piaseckiego” on TVN24. In his opinion, the government should “redden with shame” that “it allows a situation in which an entity with a dominant position on the market practically functions.” – The price of fuel in December last year was a function of a political decision – indicated the chairman of the BCC Economic Shadow Cabinet.
In 2022, the Orlen Group generated sales revenues of over PLN 278 billion. The net profit amounted to nearly PLN 35.5 billion, while a year earlier it was about PLN 11.2 billion. Net profit adjusted for the gain on bargain purchase of Grupa Lotos and Grupa PGNiG amounted to PLN 21.4 billion.
For the first time, the results were presented, taking into account the activities of four companies: PKN Orlen, Energa, Lotos and PGNiG.
– First of all, the government should blush with shame that it allows a situation in which an entity with a dominant position on the market practically functions. These great profits of Orlen, but also of PGNiG and many other fuel companies, are the result of a dominant position on the market, lack of competition and the effect of exploiting recipients and consumers – Janusz Steinhoff, former Minister of Economy, commented in “Rozmowie Piaseckiego” on TVN24.
Pointing out that the rulers indicate that during the previous government Orlen did not record such profits, Steinhoff emphasized that “then the state acted differently”. – The state is not Orlen, you need to be aware of that. It was working then the office of Competition and Consumer Protection. Our state is defenseless against a dominant entity that does whatever it wants on the market. If he uses a political, protective umbrella, then we have what we have, i.e. we have high fuel prices. This, of course, affects the competitiveness of the Polish economy and the standard of living of citizens – said the chairman of the BCC Economic Shadow Cabinet.
As he pointed out, “the billions of zlotys that Orlen generates in the form of net profit are made up of Poles at gas stations”. – This is not a great management of Orlen – because listening to President Obajtek, I doubt that he manages the company well, he does not have the appropriate experience – but the dominant position on the market determines the financial condition – summed up the former minister of economy.
Fuel prices in Poland
There were also questions about fuel prices at the turn of the year. Wholesale fuel prices in PKN Orlen fell sharply in the first days of the new year. As a result – despite the increase in the VAT rate on motor fuels from 8 to 23 percent. – at stations we observed petrol and diesel prices at the levels of previous weeks.
– The price is a function of demand and supply, in a market economy the price is shaped by the market, not politicians, presidents of companies, because they have to adapt to market requirements. The price of fuel in December last year was a function of a political decision to which President Obajtek admitted. I think he agreed this pricing strategy with President Kaczyński and the government, said Steinhoff.
As he noted, “this proves one thing that the price can be controlled.” – This proves that the market is not competitive – assessed the former minister of economy.
The guest of “Rozmowy Piaseckiego” pointed out that competition should be supervised by UOKiK. – He doesn’t do anything significant about it. We, Polish entrepreneurs, have pointed out from the very beginning that combining Orlen with Lotos, creating a company that would have over 80 percent of the wholesale gasoline market and over 70 percent of the wholesale diesel market, is the biggest economic mistake ever made. Not only that, he proves the ignorance of the law by those in power. Competition should be guarded by UOKiK, which has done nothing in this matter, assessed Steinhoff.
Would Poland run out of fuel?
Company’s head director Daniel Obajtek indicated that PKN Orlen is a multi-energy concern that stabilizes fuel prices in the country. As he pointed out, if the company did not communicate that it would try to maintain prices with the increase in VAT, panic could break out on the market.
Steinhoff, when asked about this reason, admitted that he did not think that the market would run out of fuel. – First, we maintain stocks of liquid fuels, stocks of crude oil. Secondly, there were no such anomalies in European markets with one exception (Hungary – ed.) – said the former Minister of Economy.
According to Urszula Cieślak, an analyst at the Reflex Brokerage House, the reduction of wholesale fuel prices “was an action that was supposed to confirm the announcement that after the New Year drivers will not feel any increases at stations, even though the rate will increase VAT“. In her opinion, it was an “image action”. – It happened at the expense of the fact that (…) we paid (earlier – ed.) more so that nothing would change now – said Cieślak.
UOKiK is conducting explanatory proceedings on fuel prices in Poland. UOKiK sent questions on this matter to companies dealing with wholesale trade in liquid fuels: PKN Orlen, Aramco Fuels Poland, BP Europe SE.
“Every monopoly, every dominant position hurts the economy”
According to Janusz Steinhoff, “every monopoly, every dominant position harms the economy.” – If President Obajtek yesterday (Tuesday – ed.) announces – as the president of PGNiG at the moment – that lowers the price of gas for price-list customers, i.e. for small entrepreneurs, and significantly, and shows it as a great act of good will, I ask how it is possible for a situation where the price can be reduced by 50 percent. Because at that time, the price of gas on the TTF exchange in the Netherlands did not fall by 50 percent – pointed out the former Minister of Economy.
– If the price of gas, more or less at the moment, is around EUR 50 per megawatt hour on the TTF exchange, and President Obajtek was charging EUR 150 per megawatt hour, he lowers it to over 70, and shows it as a gesture of goodwill, it proves one thing that the market is uncompetitive. – The market should be shaped – I’m talking about prices – by demand and supply – he added.
The guest of “Rozmowy Piaseckiego” on TVN24 pointed out that over 90 percent. PGNiG has the market.
Main photo source: TVN24