Poland’s government is considering tax cuts on fuel as rising oil prices linked to Middle East tensions threaten to erode public support.
Tusk Government Weighs Fuel Tax Relief
The Polish government is contemplating reductions in VAT and excise duties on fuel, but a decision is complicated by the volatile situation in the Middle East. Rising oil prices could negatively impact the government’s approval ratings, and Warsaw, according to politicians, has limited influence over events.
The government of Donald Tusk faces a dilemma: lower VAT and excise duty on fuel, or leave the situation to the market. The latter option is risky, as the duration of rising prices due to the conflict in the Middle East is uncertain.
Concerns Within the Government
A source close to Prime Minister Tusk stated, “We expect the war in Iran to end within a few weeks. But during that time, prices could rise so much that our electorate will be upset. The whole situation is keeping Donald awake at night. You can see he’s worried, even in his last television interview on TVN24’s #BezKitu, he seemed withdrawn, as if it wasn’t him.”
Trump’s Role and Iranian Response
Former President Trump claimed to be conducting “good and constructive” talks with Tehran, a claim denied by the Iranian regime, which insists no negotiations are taking place. An Iranian military spokesperson sarcastically asked if Trump was “negotiating with himself?” Israeli commentators believe Trump is determined to reach a quick agreement to stabilize oil markets.
Intervention Questioned
The Prime Minister’s Office is assessing the potential impact of high fuel prices on government support. A government source lamented, “The worst thing is that we have no influence on the international situation. Donald Trump did not foresee that the conflict in the Middle East would not unfold as he expected.”
Orlen’s Measures and State Intervention
The decision to lower VAT and excise duty formally rests with Finance Minister and Economy Minister Andrzej Domański. Orlen has already reduced its fuel margin, resulting in a price decrease of only a few groszy per liter, having lowered the diesel margin to near zero on March 9th. Minister of State Assets Wojciech Balczun stated, “We have never seen such turmoil, such a big crisis.”
The state-owned company is consistently reducing its profits from fuel sales. Balczun explained, “It minimizes its retail margin as much as possible, but you can’t act to the detriment of the company. Other instruments are in the hands of the state.”
