Czech petrol prices forecast to continue downward trend

Prices for petrol and diesel are expected to continue to fall in the Czech Republic by as much as 50 halers per litre over the next few weeks, writes Hospodářské noviny. An overall global supply surplus, combined with a strengthening crown, are cited as key factors for the trend.

Photo: Tomáš Adamec

Presently, diesel is selling for an average price of just below 29 crowns per litre, the lowest price so far this year; petrol prices, meanwhile have slumped to just a fraction above 30 crowns per litre. Falling prices in the summer months are an unusual phenomenon, writes Hospodářské noviny, with previous years demonstrating a reverse trend of rising prices over the summer.

Since then end of May, global crude oil prices have fallen by a fifth, while the Czech crown has fallen to 23.50 against the dollar, down from 25 crowns in April. Analysts are predicting that the OPEC oil cartel may seek a fresh round of production cuts in order to raise sluggish crude oil prices; however, production from non-OPEC members, such as the US, Libya and Nigeria, may fail to yield the desired price increases.

The Czech crown has been strengthening since the Czech National Bank (ČNB) decided to phase out its long-standing monetary intervention policy in April, designed to cap the crown to around 27 crowns to the euro.