The government, looking at the soaring fuel prices at Polish gas stations and under social pressure, decided to adopt regulations that set maximum fuel prices for retail sales. These are set with a daily advance by the Ministry of Energy from March 31. The regulation was to apply only until April 30, but today we know it will be extended. The Ministry of Finance announced that the package will be in effect at least until May 15.
“In response to the ongoing unstable situation in fuel markets caused by the conflict in the Middle East, the fuel package introduced in March reduced VAT and excise rates on certain motor fuels, which apply until the end of April, in accordance with the decision of the Minister of Finance and Economy. The VAT rate on gasoline, diesel and biocomponents, which were reduced from 23% to 8%, will temporarily apply until May 15.” – the ministry said in a statement.
As the Ministry of Finance added, the temporary reduction of excise tax rates on the same motor fuels was also extended until May 15. The excise on fuels was lowered to the lowest level allowed by the European Union, namely 29 cents per liter of gasoline and 28 cents per liter of diesel.
Relief for drivers
Since the CPN package came into force, drivers in Poland could feel relief regarding fuel prices. They were reduced by several tens of cents per liter day by day. Since the regulation took effect, the Ministry of Energy publishes daily in the Polish Monitor the maximum fuel prices that will apply the next day.
On Tuesday, April 28, the maximum rates were set at the following levels: 95 RON gasoline – 6.21 PLN, 98 RON – 6.72 PLN, and diesel – 7.12 PLN.
Penalties are foreseen for stations that exceed the maximum fuel prices. The sanction can amount to up to 1 million PLN.
No end to the war in the Middle East in sight
The sudden rise in fuel prices worldwide, including in Poland, is caused by the outbreak of war in the Middle East. Recall that on February 28 the United States and Israel attacked Iran. In retaliation, Iranians attacked neighboring countries cooperating with the USA, destroying part of the oil extraction infrastructure. And that’s not all. Iran also blocked the Strait of Hormuz, through which about 20% of global oil demand and nearly 30% of LNG flowed before the conflict.
Today (Tuesday, April 28) marks two months since the fighting began. Although they have been suspended in recent days, there are currently no signs on the horizon that would indicate a quick move toward peace.
Good news is that some peace talks are being attempted. Last weekend there was supposed to be a meeting between U.S. President Donald Trump, Jared Kushner, and White House special envoy Steve Witkoff with Iranian officials in the capital of Pakistan – Islamabad. The American leader withdrew from the meeting after Tehran said it did not want to talk directly with the U.S. delegation.
Although the meeting did not occur, public information indicates that the Iranian side proposed a temporary compromise that would bring about a peace agreement. It concerns eliminating talks about the elimination of Iran’s nuclear program at this stage of negotiations.
See also: Trump plays on escalation: Iran, Hormuz and the oil shock. Markets under uncertainty pressure
