Poland Proposes Windfall Tax on Oil Profits Amid Energy Crisis

Poland's government has unveiled a draft law imposing a "windfall tax" on extraordinary profits within the oil sector. This new levy, termed an "episodic public levy" by the Ministry of Finance, is a direct response to the volatile global energy markets experienced in early 2026. The crisis was fueled by escalating conflict in the Middle East and significant disruptions to key oil transport routes, particularly the blockade of the Strait of Hormuz.

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The direct impetus that prompted the government to develop a new levy was the crisis in global energy markets in the first quarter of 2026, related to the escalation of armed conflict in the Middle East region and significant disruptions in the functioning of key oil transport routes.

The conflict led to a dramatic surge in Brent crude oil prices, which climbed from approximately $65 per barrel in January 2026 to as high as $126 per barrel by March 2026. This price shock directly translated into rising fuel costs for consumers. In March, the Polish government implemented a relief package, including a reduction in VAT on fuels from 23% to 8% and lowering excise duties to the minimum EU level. These measures, along with a maximum price mechanism, placed a significant financial burden on the state budget, estimated in the billions of zloty over a short period.

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The project, which the Ministry of Finance and Economy is working on, contains a proposal to establish a new, as the Ministry of Finance indicates, "episodic public levy" – a tax on extraordinary profits (so-called windfall tax) – directed at entrepreneurs conducting business in the oil market.

The proposed windfall tax targets companies involved in the production or international trade of certain liquid fuels. The taxable base will be the excess of actual revenue over hypothetical revenue calculated using the average sales margin from the financial year ending before March 1, 2026, increased by 20%. This adjustment aims to shield profits derived from normal market fluctuations or organic business growth. Notably, the gas sector, which also saw price increases due to the Middle East conflict, has been excluded from this tax, despite its own price surges.

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What is interesting is that the gas sector has been excluded from the project, and the price of gas has also increased as a result of the conflict in the Middle East. However, the government has not decided to include the gas sector in this tax.