Polish road fuel consumption has surged this year, supported by lower taxes and increased transport demand linked to the huge influx of refugees caused by Russia's invasion of Ukraine. The steep growth in demand would make it a challenge for Poland to replace Russian diesel imports should the EU impose a ban, according to the country's fuel suppliers' association Popihn.
Early data from Popihn's members show transport fuel demand — mainly diesel and gasoline — rose by around a fifth in the first quarter compared with the same period last year. The sharp increase partly reflects the fact that Covid restrictions were in place early last year, but the main drivers were lower prices at the pump and the fallout from the Ukraine war. The start of the conflict triggered panic buying in Poland from motorists concerned about supply disruptions, and this has been compounded by increased demand linked to the transport of refugees from Ukraine, with 2.9mn people crossing the border into Poland since the invasion began on 24 February. Another key factor is the Polish government's decision to reduce road fuel tax from the start of the February, which has been attracting motorists from neighbouring countries.
This year's growth follows on from a strong recovery last year, when demand for transport fuels in Poland rebounded to an all-time high, rising by 7pc from 2020 and 2pc higher than pre-pandemic 2019, according to Popihn. Gasoline consumption rose fastest, up by 10pc on the year to 4.86mn t, while demand for diesel increased by 10pc to more than 18.3mn t, and LPG consumption was up by 4pc at over 2.57mn t.
Demand for most other oil products also recovered from the Covid-induced slump in 2020, with jet fuel consumption surging by 25pc on the year to 600,000t in 2021, and demand for low-sulphur fuel oil edging up by 1pc to 607,000t. The exception was demand for high-sulphur fuel oil, which fell by 7pc to 296,000t, according to Popihn.
Rising demand, combined with a fall in output from domestic refineries, led to higher oil product imports last year. Poland imported 915,000t of gasoline, up by 88pc on 2020, while diesel imports surged by a third to more than 5.8mn t. Russia accounted for 60pc of Poland's diesel imports in 2021, and Popihn has highlighted the difficulty in replacing this should an embargo on Russian oil supplies be enacted. It suggests that the first step in the event of a ban might be to try to increase imports from neighbouring countries such as Germany, the Czech Republic, Slovakia and Lithuania, but in the longer term Poland would need to increase seaborne imports, with Saudi Arabia the most likely source of new supply, it said.
While imports rose, exports of oil products from Poland fell last year and they remain weak in 2022, Popihn said. "Some transactions" to export or re-export to Ukraine have not changed the bigger picture that Poland is very much a net importer of oil products, the association said.
Crude dependence
Poland's efforts to reduce its dependence on Russian crude, an initiative that began long before the war in Ukraine, gained momentum last year. The share of Russian crude being processed at Poland's two refineries declined to 63pc from 70.5pc in 2020, Popihn said. Russian crude accounted for 55pc of the slate at the 325,000 b/d Plock refinery in 2021, down from 65pc in 2020. At the 210,000 b/d Gdansk refinery, the figure dropped to 84pc from 91pc.
Poland imported 15mn t of crude from Russia last year, 9mn t via the Druzhba pipeline and the rest was seaborne deliveries, Popihn said. Polish prime minister Mateusz Morawiecki said recently that Poland will do all it can to halt Russian crude imports by the end of 2022.
