Fuel price pressures persist across CEE

Erste Bank Research Team Erste Bank

On the radar

Today there are no macro releases scheduled in the region.

Economic developments

Gasoline prices have risen substantially across the CEE region since the beginning of the year, reflecting elevated global oil prices and persistent disruptions to energy markets. The strongest increase in Euro 95 gasoline prices (year-to-date as of October 12) was recorded in Czechia (+36.1%), followed by Romania (+33.3%), while Croatia and Slovakia saw increases of 27.4% and 27.3%, respectively, broadly in line with the EU average (+27.4%). Hungary stands out with a more moderate increase of 22%, while Poland recorded the smallest rise of just 16.5%, despite gasoline prices having been considerably higher earlier in the year. This relatively favorable development largely reflects government intervention through the CPN (Lower Fuel Prices) program, introduced to shield households and businesses from the surge in global oil prices. The program combines a temporary reduction in VAT on fuel from 23% to 8%, lower excise duties and government-imposed maximum retail prices for gasoline and diesel and is expected to last until the end of the year. Croatia and Czechia have also introduced direct price regulation. Although crude eased after President Trump waived sanctions and tariffs on Russia, with traders pricing additional Russian fuel supply, oil and energy prices remain elevated.

Market movements

CEE currencies have strengthened slightly against the euro over last week while long term yields declined across the region. Most notably in Hungary and Romania. In Romania there are prospects for new government that have been supportive for the yield decline. Prime Minister designate Niculescu finalized his cabinet line-up ahead of a confidence vote scheduled for October 20, where support from PSD, PNL, UDMR and other smaller parties would deliver 279 votes versus the 233 required. Hungary is waiting for the 2027 budget draft with broad based expectations of deficit between 5% and 5.5% of GDP. Tomorrow, Hungarian central bank announces interest rate decision, and we expect no change. In Czechia, final Senate election results handed victory to the opposition-leaning center-right.

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Erste Bank Research Team

Erste Bank

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