Poland’s government enacted fuel price controls and reduced excise and VAT taxes on Tuesday, aiming to lower costs at the pump and curb inflation.
Fuel Price Caps Introduced
On Tuesday, the maximum retail price for 95-octane gasoline was set at 6.16 złoty per liter, and diesel fuel at 7.60 złoty per liter, according to a ministerial decree published Monday in the Polish Monitor.
Selling fuel above the maximum price is punishable by a fine of up to 1 million złoty, with enforcement handled by the National Revenue Administration.
Price Breakdown and Tax Adjustments
The maximum price for 95-octane unleaded gasoline is 5.42 złoty per liter before VAT, rising to 6.16 złoty with the tax included. 98-octane gasoline is priced at 5.98 złoty per liter before VAT, and 6.76 złoty with VAT.
Diesel fuel has a maximum price of 6.76 złoty per liter before VAT, increasing to 7.60 złoty with VAT.
Implementation and Monitoring
The maximum price regulation takes effect the day after publication in the Polish Monitor. For announcements made before non-working days and holidays, the rate applies until the next working day.
The Ministry of Energy will publish daily announcements regarding maximum fuel prices.
Price Calculation Formula
The maximum price is calculated using a formula that includes the average wholesale price of fuel on the domestic market, plus excise duty, fuel surcharge, a sales margin of 0.30 złoty per liter, and VAT.
Legal Framework and VAT Changes
Amendments to the act on oil stockpiles came into effect on Sunday, introducing the mechanism for calculating maximum fuel prices. The changes require fuel retailers to adhere to the maximum price during periods of reduced VAT rates (effective March 31st).
Excise Duty Reduction
A regulation from the Minister of Finance and Economy, effective Monday, lowers excise duty on fuels until April 15th. Gasoline excise is reduced to 1239 złoty per 1000 liters, diesel to 880 złoty per 1000 liters, and biocomponents to 880 złoty per 1000 liters.
VAT Reduction Implemented
A regulation lowering VAT on fuels to 8% was published Saturday evening and takes effect Tuesday, remaining in place from March 31st to April 30th.
Legislative Process and Presidential Approval
Bills limiting fuel price increases were adopted by the government during an extraordinary session last Thursday and sent to the Sejm. Both acts were quickly passed by the Sejm and Senate, and subsequently signed into law by President Karol Nawrocki on the same day.
Government Aims and Potential Windfall Tax
Prime Minister Donald Tusk stated that the CPN package (“Lower Fuel Prices”) is intended to reduce prices at the pump. He also indicated the possibility of a windfall tax on excessive profits made by fuel companies.
Fiscal Impact of Tax Cuts
The Ministry of Finance estimates the excise duty reduction will cost the budget 700 million złoty per month, while the VAT reduction will cost 900 million złoty per month. The CPN package aims to limit price pressures and have an anti-inflationary effect while ensuring fuel supply security.
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