Poland slashes fuel prices ahead of weekend as government extends CPN price-cap programme

New price caps announced

Polish drivers will pay less at the pump on Friday 29 May after Energy Minister Miłosz Motyka published the latest maximum fuel prices under the government's "Ceny Paliw Niżej" (CPN) programme. The new caps set the price of Pb95 petrol at no more than 6.16 zł per litre, Pb98 at 6.73 zł, and diesel at 6.37 zł. Compared with Thursday's limits, that represents a drop of 15 groszy for Pb95, 13 groszy for Pb98, and 20 groszy for diesel.

The situation on the markets is cautiously optimistic.

The daily price-setting mechanism, introduced on 31 March in response to Middle East tensions and the blockade of the Strait of Hormuz, requires the energy ministry to publish binding maximum prices each working day. The caps take effect the day after publication in the official Monitor Polski journal and carry fines of up to 1 million zł for stations that exceed them.

How the formula works

The maximum price is calculated using a fixed formula: the arithmetic average of wholesale fuel prices reported by Poland's five largest market participants on the previous working day, plus excise duty, fuel surcharge, a fixed retail margin of 0.30 zł per litre, and VAT. Two temporary tax-cutting regulations underpin the scheme — one slashing VAT on fuel from 23% to 8%, and another reducing excise duty by 29 groszy per litre of petrol and 28 groszy per litre of diesel, the minimum levels allowed under EU law. Both regulations are currently set to expire on 31 May.

Enforcement and compliance

Oversight falls to the National Revenue Administration (KAS), which has inspected more than 9,000 petrol stations since the caps were introduced. According to the Ministry of Finance, irregularities were found at nearly 540 stations, though no financial penalties have yet been imposed. The law allows fines of up to 1 million zł for selling above the maximum price.

Programme's future uncertain

With the tax-cutting regulations due to lapse at the end of May, attention is turning to whether the CPN package will be extended. Minister Motyka told Radio ZET that while the final decision rests with Finance Minister Andrzej Domański, he believes the programme should continue at least until mid-June. Domański indicated on Monday that an extension is "very possible." Motyka stressed that conditions do not yet allow the protective mechanism to be fully withdrawn, even as wholesale prices fall and global oil markets show signs of stabilisation.

This is a decision that will result from the decision and recommendation of the finance minister, but I believe it should be extended by two weeks, until at least mid-June.

Market backdrop

Analysts at e-petrol.pl note that falling crude oil prices on global exchanges have forced domestic producers to adjust. State-controlled refiner Orlen sharply cut its wholesale prices in recent days, giving retail stations room to comply with the government caps without risking immediate financial distress. The combination of lower wholesale costs and the tax reductions has brought Pb95 back to 6.16 zł — the same level as on 31 March, the first day of the programme — while diesel has fallen dramatically from its 31 March cap of 7.60 zł to Friday's 6.37 zł.