Diesel Is the Most Expensive in Slovakia Since November 2022. Bratislava Rejects a Lower Tax, Prague a Margin Cap

A liter of regular diesel cost 1.88 euros at Slovak filling stations at the end of August, and according to the Statistical Office of the SR, this is the highest level since November 2022. STVR ↗ In Czechia, the average price of diesel climbed on Sunday to 47.21 crowns, that is 14.16 crowns more than a year ago. Aktuálně.cz ↗

Both figures predate Tuesday's escalation in the Persian Gulf, so they could not have reflected it — prices were already rising beforehand. According to analysts, however, the new tensions are adding pressure toward further price increases. In the same week, both governments rejected a tool being discussed domestically: in Slovakia, a cut to the excise tax demanded by the opposition; in Czechia, a cap on margins that the government itself had been considering. On Thursday, according to the Czech prime minister, the Visegrád Four prime ministers are also set to discuss fuel prices in Bratislava. TASR ↗

What happened in the Gulf

On Tuesday, Yemen's Houthis, according to their own military spokesman, struck four Saudi Arabian cities with rockets and drones. Le Monde reports 73 injured civilians and a promise from Riyadh that it would respond. Le Monde ↗

Saudi Arabia subsequently suspended operations at several energy facilities in the south of the country. de Volkskrant ↗ US Secretary of State Marco Rubio sees "the hand of Iran" behind the attack — this is his accusation, not a proven fact. The European Union called on the Houthis to stop the attacks. La Libre ↗

The market reacted immediately. The price of North Sea Brent crude briefly moved close to the hundred-dollar mark on Tuesday — its highest point since July 24. Hospodárske noviny ↗ Meanwhile, according to Portugal's Expresso, Iran's leadership threatened to close the Strait of Hormuz again. Expresso ↗

Why diesel is rising faster than gasoline

The price of both fuels is made up of the same components — oil, refining margin, distribution and taxes. Right now, however, three factors are pushing diesel upward at once that either don't affect gasoline or affect it less.

The first is refining capacity. According to Hospodárske noviny, it was said at the Asia-Pacific oil conference APPEC that global diesel supplies will remain constrained — there is a lack of spare refining capacity, and Russia has banned diesel exports. Hospodárske noviny ↗ XTB analyst Jiří Tyleček estimates the global supply shortfall at 1.3 to 1.4 million barrels per day. Deník ↗

The second is winter. Heating oil and diesel fuel are among the middle distillates and compete for the same portion of refinery output. Seasonal heating demand is thus colliding with planned shutdowns at European refineries. Seznam Zprávy ↗

The third is imports. According to STVR, every fifth liter of diesel sold at filling stations is imported. STVR ↗ Petr Dufek, chief economist at Creditas bank, notes that Russia is losing part of its oil-processing capacity, has restricted exports of other fuels as well, and in some periods imports gasoline and diesel itself. Deník ↗

Bratislava rejected the tax, Prague the margins

The Slovak opposition is demanding an intervention in the tax. "Let's lower the excise tax to the minimum allowed by the EU. We're also saying that with such draconian prices, it would be good to temporarily lower the VAT as well," said SaS member of parliament Marián Viskupič. The Ministry of Finance called this a political statement: according to spokesperson Pavel Kirinovič, it would mean a loss of budget resources "in the range of tens to hundreds of millions of euros." The government already agreed on this back in May, when Economy Minister Denisa Saková announced that, given the state of public finances, it would lower neither the excise tax nor VAT. STVR ↗

In Czechia, the dispute is over a different lever — margins. Before the cabinet meeting, Prime Minister Andrej Babiš had suggested he might regulate them again, but afterward rejected the idea. "The margins that the Ministry of Finance monitors are at most three crowns," he said, adding that he had been told there was no room within margins. He shifted the blame to refineries: according to him, both the war in Ukraine and the conflict over Hormuz are gradually destroying refining capacity, American refineries' margins are at record highs, and Europe lacks capacity because the Union decided to move away from fossil fuels. Aktuálně.cz ↗

ODS chairman Martin Kupka claims that Babiš is being evasive, since he is well aware that he cannot impose a margin cap on refineries. On this point, Kupka noted that "this is a matter over which the Czech government has no control." At the same time, he says that regulating sellers' margins according to the original summer setup would actually raise prices, and that a decrease would more likely come from lowering the excise tax and ending the conflict. Aktuálně.cz ↗ The Czech government actually regulated margins from April until mid-July of this year. Respekt ↗

The debates in both countries are thus diverging, yet converging on one point: the tool that the Czech opposition and hauliers are proposing — cutting the excise tax — is exactly the one the Slovak Ministry of Finance rejected. The Česmad Bohemia association warns that diesel at fifty crowns would be a problem for a significant share of hauliers. iDNES ↗

Switzerland dipped into mandatory reserves, but for a different reason

This week Bern authorized drawing up to 30,000 cubic meters of diesel fuel and the same amount of gasoline from mandatory reserves, from September 8 to 20. In each case this is less than three percent of stored reserves, and it is an authorization to draw down, not proof that the entire volume was actually withdrawn.

This is not a reaction to the Gulf or to prices. The reason is a technical fault: the refinery in Cressier in the canton of Neuchâtel, which covers more than 30 percent of Swiss consumption of petroleum products, halted operations last week and is expected to restart in mid-September. The outage hit an already strained situation — low water levels on the Rhine have restricted shipping capacity for weeks, and supplies have had to travel by rail and pipeline from France. SRF ↗ Tages-Anzeiger ↗

For a Central European reader, what's interesting here is precisely this parallel: a river with low water can complicate fuel supply just as much as a war — only quietly, without headlines.

A bill someone is already paying

The price of fuel doesn't stop at the pump. On September 2, Ryanair announced it would be cutting flights in the winter schedule, and stated the reason directly: through March 2027 it has secured 80 percent of its jet fuel consumption at 67 dollars a barrel, the price before the conflict with Iran, but it must buy the remaining twenty percent at the current roughly 140 dollars. According to the company, the cuts are meant to reduce winter losses by 70 to 100 million euros. The airline has not disclosed which routes will be affected. The daily SME found that two routes that flew last winter from Bratislava to Edinburgh and to Dalaman in Turkey have disappeared from the booking system. SME ↗

Other newsrooms further from the pump also describe the impact. According to La Tribune, French industry is facing a double squeeze from gas and carbon prices that could choke production La Tribune ↗, and Romania's Adevărul highlights a UN warning that the war over Hormuz is hitting small firms the hardest. Adevărul ↗

Austria's ORF adds a side effect that will only show up in price lists with a delay: the security vacuum around shipping routes is also returning in the form of Somali piracy, and ship hijackings are driving up insurance costs and the cost of detours. Since April, at least six merchant vessels have been hijacked off the Somali coast and more than 90 sailors taken captive; according to an analysis by the maritime journal Lloyd's List, more than 120 pirates are operating there. ORF ↗

Limits of this view

Not everyone reads the situation as a one-way path to further price increases. On the same day, iDNES wrote that, despite everything, oil remains below the hundred-dollar mark, citing weaker Chinese demand and alternative shipping routes among the factors braking the rise. iDNES ↗ Poland's Rzeczpospolita, meanwhile, notes that Kuwait has resumed oil exports through Hormuz, which is recovering quickly despite the war. Rzeczpospolita ↗

The reverse scenario also holds. Radovan Potočár, analyst and editor-in-chief of the portal Energie-portal.sk, notes: "If, in some ideal scenario, the whole conflict could be de-escalated and exports from the Persian Gulf reopened, that would be a good impetus for prices to fall significantly." STVR ↗

And forecasts should be read as forecasts. J&T Banka analyst Stanislav Pánis acknowledges that the two-euro-per-liter threshold for diesel could be tested. XTB analyst Ondrej Greguš says that signs of the market calming down have already been seen — the problem is that they haven't held so far. Pravda ↗

Illustrative photo: Orlen filling station in Strečno, August 2023. The prices on the board date from when the photo was taken, not the present. Author: Fallaner, Wikimedia Commons, CC BY 4.0.

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