Polish drivers will feel the first increase in fuel prices starting today, June 17. The government has extended the reduced VAT rate of 8% and the mechanism for maximum prices at gas stations until the end of the month, but has refused to extend the reduced excise tax rate.
The full excise tax rate came into effect on June 16, but due to the specifics of calculating maximum prices at gas stations, the increase has only become noticeable today.
According to available estimates, maximum prices will rise by approximately 29 groszy per liter of gasoline (about 14.5 zlotys for filling a full 50-liter tank) and by 28 groszy per liter of diesel fuel (around 14 zlotys for the same volume). This one-time increase is solely related to tax changes and does not depend on fluctuations in oil prices on the global market.
What happened?
On June 12, a regulation was published in the Polish Dziennik Ustaw extending the reduced VAT rate on gasoline, diesel fuel, and bio-components, which is in effect instead of the standard 23%. At the same time, the mechanism for maximum prices at gas stations has been maintained.
However, the approach to excise tax has changed: while previously both exemptions were extended simultaneously, this time the excise discount expired on June 16 without extension.
The second stage of price increases will occur on July 1
Experts describe today’s price increase as only the first step. A more significant jump is expected on July 1, when both the reduced VAT and the mechanism for maximum prices will end.
After that, the tax will return to the standard rate of 23%, and combined with the already restored excise tax, this could lead to further price increases at gas stations.
According to forecasts from Polish media, after the complete abolition of exemptions, gasoline and diesel fuel could increase by 0.8–1 zloty per liter compared to June levels. For a car with a 45-liter tank, this means additional costs of about 40 zlotys per fill-up.
How much has Poland spent on controlling fuel prices?
The issue of fuel prices in Poland has long transcended economics and gained political significance. The state program for controlling prices allowed for keeping fuel costs below market levels through tax exemptions and restrictions at gas stations, but it was not cheap for the budget.
According to the Ministry of Finance, the reduction in excise tax cost the state about 700 million zlotys per month, while the reduced VAT rate accounted for another approximately 900 million zlotys. In total, the budget was losing about 1.6 billion zlotys each month.
