Tusk Links Fuel Price Regulation to Holiday Returns, Cites Mideast Instability

Polish Prime Minister Donald Tusk has announced that the government will consider regulating fuel prices for at least the last two weeks of the summer holiday season. This potential intervention is specifically tied to a condition: it will only be implemented if global oil prices surge again due to instability in the Middle East. Tusk stated that he had discussed the matter with the finance minister, indicating a readiness to act if market conditions necessitate it.

The announcement comes as global benchmark Brent crude oil prices hovered around $89 per barrel on Monday, having briefly exceeded $100 per barrel in the previous week. The government's previous efforts to stabilize fuel costs included reducing the VAT on fuels to 8% and lowering excise duties to the minimum EU levels, under a package called "Lower Fuel Prices" (CPN), which concluded at the end of June. The cost of this CPN program was approximately 4.7 billion Polish zloty.

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If it turns out that the situation is unstable again, that prices could go up again, then we will propose a solution so that at least for the last two weeks of vacation, when people start returning from vacation - we introduce, despite this blockade (referral to the Constitutional Tribunal by the president of the act on excess profits of fuel companies - PAP), regulated prices (of fuel).

Adding a layer of complexity, President Andrzej Duda recently sent a bill concerning a windfall tax on excess profits of fuel companies to the Constitutional Tribunal. Prime Minister Tusk expressed regret over the potential loss of 4 billion zloty, funds that were earmarked to help lower fuel prices. This tax was intended to partially offset the budget revenue lost from the fuel price reduction measures. The proposed law stipulated that fuel producers and sellers would collectively pay 4 billion zloty in tax on extraordinary profits earned during periods of elevated energy prices.

Tusk made these remarks during a press conference in Głuchołazy. The potential price regulation aims to provide relief to citizens returning from holidays, cushioning the impact of any sudden price hikes driven by international events. The government's approach highlights a delicate balancing act between managing domestic fuel costs and navigating international market volatility.

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It's a bit of a shame about those 4 billion zloty, because we allocated them to lowering fuel prices.