Czech finance ministry caps fuel prices until end of October

The Czech government has capped retail fuel prices for the second time this year: under a decision by the Ministry of Finance, diesel at petrol stations cannot cost more than 48.72 crowns a litre, and petrol no more than 46.14 crowns. The largest chains immediately put up price-board figures that match this ceiling exactly.

Prices worked out to the hundredth of a crown

Because of the cap, fuel retailers have started calculating prices literally down to the heller — hundredths of a crown. At the Orlen station on the D10 motorway near Mladá Boleslav, for example, diesel is now sold at 48.72 crowns, exactly at the permitted maximum down to the last two hellers. As recently as Wednesday, a litre there cost 52.50 crowns — almost four crowns more. Petrol at the same station dropped from 47.90 to 46.14 crowns, a cut of 1.76 crowns.

The MOL chain did something similar: on Rudolfovská street in České Budějovice, diesel is sold at 48.70 crowns — just two hellers below the cap. OMV in Ostrava set the same price for diesel, while its petrol costs 46.10 crowns, just four hellers below the state-set limit.

The gap between motorway and city prices has nearly disappeared

According to Štěpán Křeček, chief economist at BH Securities, diesel at the pump near the Globus store in Prague currently costs 48.50 crowns, while at the Shell station on the D11 motorway entering Prague it is 48.72 crowns — right at the cap. “The gap between motorway stations and others has shrunk to a few tens of hellers, which is unusual: as recently as yesterday it was measured in whole crowns,” the expert noted.

The state-owned chain is keeping prices below the cap

The cheapest fuel is being sold by EuroOil, a chain owned by the state through the company Čepro. On Pražská street in Mladá Boleslav, it is currently asking 47.50 crowns for diesel — 2.40 crowns less than on Wednesday. EuroOil sells petrol at 45.50 crowns, the same price that applied before the price controls were introduced.

Why fuel is getting more expensive for the second time this year

The Ministry of Finance plans to keep the price caps in place at least until the end of October. Officials link the rise in fuel prices to the conflict in the Middle East: in February, the US and Israel struck Iran, which responded by restricting shipping through the Strait of Hormuz — before the war, a fifth of the world's oil consumption passed through it.

This is already the Czech government's second intervention in fuel prices this year. The first round of caps was in effect from the first half of April until mid-July, and that time the authorities moved gradually: first capping retailers' maximum margin, then cutting the excise duty on diesel by 2.35 crowns including tax.

Source: novinky.cz