It must be remembered that in those days foreign and domestic companies in Poland operated under very different conditions than today, and it was important that problems should brought to attention and solutions sought. In the end everyone benefited from the changes that were introduced”, Jacek Wróblewski, General Director of the Polish Organisation for Petroleum Industry and Trade (Polska Organizacja Przemysłu i Handlu Naftowego, POPiHN), tells Polish Market’s Jerzy Bojanowicz.

Ecology projects
Q: Why does POPiHN operate on the strength of an act on employer organizations and not commercial chamber laws?
A: I believe the reasons were mainly pragmatic. Our founders were not planning a chamber for all enterprisers but only the biggest ones. Today we affiliate 14 operators. Also, Polish commercial affiliation laws offer possibilities to participate in legislation, which is one of our organisation’s basic goals.
Q: Which of your initiatives would you call most successful?
A: Our efforts to promote the principles of the market economy are not always received well. Also, despite numerous amendments Polish business laws still contain clauses which impair competition. Often a minor change in a law or directive can bring amazing results, also important is the correct interpretation of laws – especially EU directives. Certainly one of our successes was the discontinuation of licences for fuel importers to Poland. These licences were a huge hindrance and made sustained fuel supply difficult. We also successfully compiled a set of tax control regulations for fuel supplies from the EU. In the sphere of fuel quality we pushed through changes which all drivers welcomed – today there is adequate control not only over environmental parameters as in other EU countries, but also over engine-influencing factors. Our postulate for control over LPG was fulfilled, even though it was initially regarded as a “secondary” fuel.
We sometimes work together with the Polish Organisation for Liquid Gas (Polska Organizacja Gazu Płynnego) and Polish Chamber for Liquid Fuels (Polska Izba Paliw Płynnych), although our goals are not always the same.
A very successful project was a 2007-launched monitoring system for the domestic fuel market. Reports based on the data it gathers were very well received by our members from the fuel industry.
Q: What is your opinion about fuel sold in Poland?
A: Fuel quality is rising steadily, although, given the size of the fuel market, I believe the government still channels insufficient funds toward fuel control. Earlier fuel quality was questionable in more than ten percent of surveyed stations, today the figure is down to 4-6 percent. The ideal level would be the EU average – 1-3 percent. Poland’s figure shows that some people here still can’t resist the temptation to make a fast buck on inferior fuel.
The problem in Poland is the lack of adequate legal sanctions in such cases – fines may only be imposed upon a court verdict, in addition court proceedings are lengthy and charges are frequently dismissed on grounds that the offence does little harm to society. Prosecutors often fail to prepare their evidence properly, and the sentences that do fall are usually very mild.
Q: You group well-known oil companies which run fuel stations in Poland – but the fuel they offer is from the same producers…
A: Depending on the region, the fuel comes either from Germany (in the west close to the German border), Lotos (in the north), Orlen (central Poland) or Slovnaft (in the south). Also available is fuel from the east, which we import by sea. Over 35% of Poland’s Diesel comes from abroad. All the fuels meet EU and domestic quality norms, so we may say that it is all the “same” fuel – or fuel of equal quality – regardless of source. The only minor difference is in the enriching additives fuel companies put in.
Q: What is the condition of the Polish fuel market?
Last year Polish refineries processed more than 20 million tons of oil, 1.6% more than in the preceding year. The first quarter of each year always brings a consumption drop, with sales peaking over July and August followed by a slight drop in autumn. This year the spring figures were several percent above 2007, and this despite the high fuel prices. This is proof that the Polish economy is on the rise and Polish consumers have more money to spend.
Q: What share of the market does Diesel have in Poland?
A: At the moment twice as much of it is sold as petrol. In 2007 LPG sales stood at 2.4 million tons, petrol at 4.7 million tons and Diesel at 10.5 million tons. Petrol sales were 4% above 2006, LPG down 3%, heating oil down 25%, and Diesel up 22%.
Q: Are there enough fuel stations in Poland?
A: Poland is on the EU average. Of course there are countries with denser networks, but because of the low retail margins stations today are not built as freely as in earlier days, and those that are require more carefull siting. In 2007 Poland had about 6.9 thousand fuel stations. Noticeable is the continuing expansion of foreign operators – 121 new foreign stations opened in Poland last year. The change is that less stations are built from scratch as independent operators have been offered attractive franchise deals, which is certainly cheaper. In coming years I predict no radical increase or decrease in the number of fuel stations in Poland.
Today fuel operators must deal with a dangerous rival, namely fuel stations run by supermarket chains. Such stations have minimum margins because fuel is not the main income source of the supermarket chains that operate them. Supermarkets run fuel stations to attract customers and their prices force larger operators to sink theirs. This is not bona fide honest, though understandably welcome by consumers.
Q What can we expect in the future?
A: Last year POPiHN compiled a projection of Poland’s liquid fuel demand until 2010. In light of global trends and the situation on the domestic market in recent years, we should expect a further rise in Diesel sales – from 10.3 million m3 in 2006 to 14.8 million m3 in 2010. The corresponding figures for petrol and LPG are 6.04 and 4.41 million m3 respectively in 2006 and 6.48 and 4.27 million m3 in 2010. Petrol sales will rise slowly due to falling demand. Rising LPG and LPG installation prices coupled with the appearance of highlyeconomical Diesel engines have also brought down the LPG market, which is not expected to grow very much.
Q: What about biofuel?
A: In all 93,000 tons of bio-components were put on the market in 2007, including 63,000 tons of bioethanol (in pure form as a petrol component or as ethers added during production). Also 30,000 tons of esters, mainly in B-20 fuel from the Trzebinia Refinery. We also produced 1.3 million m3 of alcohol-content petrol. In effect, 32% of the petroleum on the market contained bio-components.
Poland is obliged to observe EU fuel market norms, the question is how to do it. This year’s Indicator Goal - a 3.45% bio-component share in heating fuel and about 5% in motor fuel – can be met by adding bio-components to conventional fuel. However, in coming years the indicator goals will not be as easy to meet (e.g. 5.4% in 2009). Without changes in quality norms, in other words raising the bio-component level for conventional fuel (even up to 10%), biofuel will have to be sold as a separate product. A biofuel already available in some stations is B100 (pure esters), sold at PLN 0.2-0.3 below Diesel despite higher production costs. The Indicator Goals force fuel producers and importers to sink prices below production costs. Most probably they will try to recoup these losses by raising conventional fuel and Diesel prices.
POPiHN has moved for the biannual accounting of Indicator Goals, we have also postulated higher bio-component quotas for fuel (7-10%). We also hope the government will promote biofuel – last year’s biofuel program was too general and chaotic.
Q: Is that why you advocate saving fuel on your website?
A: Environmental care has become a permanent fixture in the business strategies of fuel companies. Refineries have spent enormous amounts on raising fuel quality and reducing their negative effect on the environment. The Don’t Just Save Fuel campaign now underway in 45.000 fuel stations run by 42 companies in 29 European countries is directed to drivers and gives them a chance to do something for the environment. Lower fuel consumption not only means more money left in driver pockets, it is also important to use fuel more rationally in view of its sinking and unrenewable resources.