MOL To Cut Fuels Prices Again, The End Of Its Streak May Be Near

However, the reduction may easily be one of the last ones therefore it will be worth keeping an eye on oil and exchange rate changes in the coming days.

Following the price cuts on Wednesday (3 Dec), MOL will sell a litre of gasoline to retailers for HUF 225.4, while the gross wholesale list price of diesel will be lowered to HUF 252.9. 

While retailers follow their own pricing models, drivers can expect to pay about HUF 5 and HUF 8 less for a litre of gasoline and diesel as of Wednesday, respectively. This means that the pump price of former fuel will be around HUF 240 and a litre of diesel will be around HUF 268.

The price of gasoline was lowered every week in the past ten weeks, and with Wednesday's move its price will be down by a total of HUF 67 since 20 September.

In this period, the price of diesel was cut ten times (including the one coming this Wednesday) by a total of HUF 46.

The last time the price of gasoline was at such lows (as it will be as of Wednesday) was in August 2005, while that of diesel will be down at a more than 12-m low (it was around 265 in September 2007).

Portfolio.hu viewpoint

MOL's price reduction comes as a surprise, since the price of gasoline and diesel rose last week only in dollar terms by 16.5% and 0.9%, respectively. (The forint's weakening versus the USD has somewhat eroded this impact, as in forint terms the price of gasoline went up by 11% and that of diesel dropped by 4%.

MOL will deliver a cut despite the sharp rise in the price of gasoline probably because it still has some pricing firepower as the result of the past months' hectic currency and commodity price movements (it presumably lowered its prices to a smaller degree than it actually could have).

If last week's increase in the price of fuels, however, prove to be a lasting phenomenon, this price reduction may be one of the last such actions we'll see. Therefore it will be worth keeping a close eye on oil and exchange rate changes in the days to come."

Source: Portfolio Online Financial Journal