Poland evaluates fuel price relief and VAT reductions

The Polish government is evaluating potential measures to lower fuel prices following the expiration of the 'Ceny Paliwa Niżej' (CPN) program in June. Officials, including Minister of Finance Andrzej Domański and Minister of Energy Miłosz Motyka, indicated that a decision regarding a possible return of protective measures or a reduction in VAT could be made within days.

Key challenges include high retail prices for gasoline and diesel, as well as limited diesel availability. The government is also navigating budgetary constraints caused by President Karol Nawrocki's decision to refer the windfall tax on fuel companies to the Constitutional Tribunal for preventive review. This move has blocked an estimated 4 billion PLN in potential revenue intended to fund fuel relief programs.

Proposed solutions include a temporary VAT reduction to 8 percent and new mechanisms to regulate retail prices, ensuring they drop more quickly when wholesale costs decrease. Some officials suggest that the lack of funding for relief programs is a direct consequence of the President's legal actions regarding the windfall tax.