Inflation may drop in July thanks to discounts on petrol says economist

Special discounts on petrol, such as the one introduced by PKN Orlen, the dominant Polish fuel company, may play an important role in lowering inflation, PKO BP’s chief economist said on Monday.

Piotr Bujak told a Catholic radio broadcaster that "energy prices continue to rise, mainly those for natural gas, due to Russia limiting supplies to the European economy," but he added that "oil prices are stable and agricultural prices are stabilising."

This, he said, means there is "a possibility that inflation will stabilise in the coming months."

He also mentioned that there was a chance that inflation, which according to the preliminary measurements of the Central Statistical Office (GUS) hit 15.6 percent year on year and 1.5 percent month on month, would drop slightly in the coming months.

In his opinion, "the very significant discounts in the petrol market introduced by PKN Orlen may play a significant role."

"The market will follow along," added the economist.

Bujak, noted that if this leads to a drop in fuel prices in July, as compared to June, by at least 2-3 percent, then "it may turn out that the level of inflation in July will be lower than in June, and in the following months it may get even better."

PKN Orlen, Lotos BP and Moya all announced discounts ranging from PLN 0.10-0.30 (EUR 0.02-0.06) per litre as part of a summer promotion on petrol purchases.