The Polish government is evaluating a reduction in VAT on fuels and potential taxation of oil companies’ windfall profits amid rising prices.
Government Weighs Fuel Tax Adjustments
The Polish government is preparing a decision regarding fuel taxes, with a potential VAT reduction under consideration. Drivers are awaiting a response to the rising fuel costs.
Finance and Economy Minister Andrzej Domański stated that while a VAT reduction is probable, no final decision has been made. The introduction of a tax on excess profits of fuel companies is also being considered, though it is not currently being actively pursued.
VAT Reduction Analysis
Minister Domański assured that the government is analyzing the fuel market situation and working on solutions to counter price increases at stations, with a VAT reduction on fuel products being one possible decision.
He emphasized the importance of ensuring that any VAT reduction translates into lower gasoline prices for drivers, rather than being absorbed by suppliers, distributors, or gas stations.
Potential Excess Profit Tax
The minister noted that an excess profit tax on fuel companies could help prevent this absorption of the VAT reduction.
Domański clearly stated that the government does not exclude the possibility of introducing a tax on excess profits, stemming from high refinery margins—not only in Poland but across Europe—directly linked to high crude oil prices.
Orlen’s Margin Reduction and Supply Security
Domański reminded that Orlen has already lowered its margins, which helped to moderate price increases at gas stations, as other fuel networks adjusted to the levels of the largest player in the Polish market.
He also assured that deliveries of oil and gas to Poland are secure, and state strategic reserves remain at statutory levels, sufficient for up to 90 days.
Poland has diversified its sources of oil and gas supply and possesses a developed infrastructure enabling imports from various locations worldwide.
Fluctuating Oil Prices and Geopolitical Factors
On Thursday morning, the price of Brent crude oil on world exchanges reached almost $100 per barrel.
This increase was triggered by the Iranian blockade of the Strait of Hormuz following Israeli-American strikes, disrupting the transport of approximately 20% of the world’s oil supply.