Poland Weighs 2-Week Fuel Price Caps as Middle East Tensions Keep Crude High

Q: How will Poland fund new summer fuel caps after the president blocked the crucial billion-dollar windfall tax on energy giants?

Poland does not yet have a clear replacement funding source for new summer fuel caps. The blocked windfall tax on energy companies was supposed to raise about 4 billion zloty, roughly enough to offset most of the earlier relief package, but President Karol Nawrocki’s referral of the law to the Constitutional Tribunal has effectively frozen that revenue for now. That means any renewed cap for the final two weeks of the summer holiday would most likely have to be financed directly from the state budget, at least temporarily. Prime Minister Donald Tusk said he would discuss the issue with the finance minister immediately, signaling that Warsaw may have to find room in existing public finances rather than rely on the tax proceeds. The previous fuel support package was expensive. The finance ministry estimated it cost around 1.6 billion zloty per month, with total spending of about 4.7 billion zloty before the measures expired. Because the possible new intervention would be shorter and narrower, covering only two weeks, its budget cost would be far lower than the earlier full-month program, which may make direct budget financing politically and fiscally easier. In practice, Poland’s options are limited to short-term budget funding, reprioritizing spending, or reviving some tax-cut or price-cap mechanism without the windfall-tax offset. The government has not announced a finalized financing plan, only that it is prepared to intervene again if oil-market instability persists.

3 articles · Updated · Bloomberg · Jul 28

Poland may restore cheaper gasoline and diesel prices for the last two weeks of summer vacation if oil markets remain unstable, Prime Minister Donald Tusk said Monday.
Retail fuel prices jumped after an earlier support program expired, while crude costs stayed elevated amid tensions in the Middle East.
Tusk said the government is considering the intervention even after the president blocked a windfall tax that had been intended to finance the subsidies.
The move would mark another state effort to cushion Polish drivers from global energy-market volatility during a peak travel period.