Poland's fuel price shield CPN will end this summer, prime minister confirms
Prime Minister Donald Tusk announced the CPN fuel subsidy programme will be wound down this summer, citing peace signals in the US-Iran conflict and the government's fulfillment of its pledge to cap pump prices during the crisis.
Programme CPN will end this summer
Prime Minister Donald Tusk stated during a press conference in Łomża on Saturday that the "Ceny Paliwa Niżej" (CPN) fuel price intervention package will be concluded this summer. The programme, introduced at the end of March, shielded Polish drivers from the oil price shock triggered by the US-Israeli attack on Iran on 28 February.
We assumed, and we delivered, that we would subsidise fuel prices until the summer so they wouldn't shoot up. We had the cheapest fuel in Europe throughout this crisis, but of course we will now be winding down this project, in the summer.
How the package cushioned the fuel crisis
The CPN package brought VAT on motor fuels from 23% down to 8%, while excise duty was cut by 29 groszy per litre for petrol and 28 groszy for diesel, the minimum allowed under EU rules. A maximum price mechanism was also introduced, with the energy minister publishing daily caps. Selling above the cap carries a fine of up to 1 million złoty, enforced by the National Revenue Administration.
What changes for drivers in June
On Friday the government published a regulation extending the lower VAT rates, but the Polish Press Agency reported, citing a source close to the finance ministry, that the excise duty reduction will not be prolonged. From 15 to 30 June, only the 8% VAT rate and the daily maximum prices will remain in force. After that, the full package retreats, bringing pump prices back toward market levels. The enabling law allows the excise reduction to be applied by decree only until 30 June.
- US and Israel launch strikes on Iran; Supreme Leader Ali Chamenei killed. Iran blocks the Strait of Hormuz.
- Polish government introduces CPN package: VAT cut to 8%, excise reduced to EU minimum, maximum fuel prices set.
- Excise duty reduction expires. From this date only 8% VAT and daily maximum prices remain in force.
- Lower VAT and maximum price mechanism expire. CPN programme ends.
War in the Middle East sparked the price spike
The 28 February strikes by the US and Israel on Iranian targets, including the killing of Supreme Leader Ali Chamenei, prompted Tehran to block the Strait of Hormuz, a critical chokepoint for global energy supplies. Crude oil and refined product prices surged worldwide, translating into steep retail fuel price increases in Poland.
Hope from peace talks
The prime minister said there are "decent" signals that the US-Iran conflict might wind down. He pointed to the UAE's decision to unblock Iranian funds as a concrete step linked to progress in peace negotiations.
The first information, decisions like the UAE unblocking Iranian money in connection with progress in peace talks, give hope that the fuel price increases caused by the war will be halted and that prices will return to some normal level.
