Fuel Prices May Drop: Minister Announces Decision Timeline

Finance Minister Andrzej Domański announced that a decision on cutting fuel VAT will be made in the coming days, though budget constraints remain a hurdle.

Budget Constraints and Presidential Intervention

Finance and Economy Minister Andrzej Domański announced that a decision on whether to cut fuel VAT will be finalized in the coming days. He noted that government options are constrained by budget issues linked to President Nawrocki referring the windfall tax on energy corporations to the Constitutional Tribunal.

Speaking on TVN24, Domański stated that analyses are underway while the oil market stabilizes. He acknowledged that fuel station prices remain high and that the government wants lower prices, but budget limits exist because President Nawrocki chose to block the windfall tax law on fuel companies, which would have provided the budget with a bit over 4 billion zlotys.

Legislative Options and Market Challenges

The head of the finance ministry emphasized that the state must be ready for all scenarios, noting that the problem is not only high oil prices but also low diesel availability.

The minister pointed out that currently, due to legislative reasons, only a VAT reduction on fuel is possible. Domański stated that the government still needs a few days to decide whether such a decision will be made.

Expiration of Previous Reductions and Constitutional Challenge

Regulations providing reduced VAT rates and maximum prices for certain fuels at gas stations expired on June 30. Earlier in June, provisions on excise duty cuts also expired, with the Ministry of Finance estimating the cost of the “Lower Fuel Prices” program at roughly 4.7 billion zlotys.

On July 24, President Karol Nawrocki referred the windfall tax act on fuel companies to the Constitutional Tribunal under preventive control, assessing that its provisions violate the principle that law does not operate retroactively.