Poland Lowers Maximum Fuel Prices on Thursday Amid Ongoing Iran Crisis and Government Tax Cuts

Oil crisis and price surge

After Iran blocked the Strait of Hormuz in retaliation for American-Israeli strikes at the end of February, global oil prices spiked, hitting Polish fuel markets hard. Before government intervention, the spike cost drivers and companies an estimated 2.5 billion złoty between 28 February and the end of March, according to Michał Grabka of Fundacja Instrat. Diesel prices on the wholesale market soared above 7,200 zł per cubic meter, driving retail costs up sharply.

Government response: the CPN package

In response, the Polish government introduced the "CPN" (Ceny Paliw Niżej) package, which temporarily cut VAT on fuel from 23% to 8% and reduced excise taxes to the minimum allowed by the European Union—by 29 groszy per liter for petrol and 28 groszy for diesel. The legislation was fast-tracked through parliament and signed by President Karol Nawrocki, with maximum fuel prices first set on 31 March. On that day, the caps were 6.16 zł/l for Pb95, 6.76 zł/l for Pb98, and 7.60 zł/l for diesel.

Thursday's price drop

On Wednesday, the Ministry of Energy published its latest daily notice, setting the maximum prices for Thursday, 28 May. Compared to Wednesday, Pb95 will fall by 11 groszy to 6.31 zł/l, Pb98 by 10 groszy to 6.86 zł/l, and diesel by 18 groszy to 6.57 zł/l. The decline reflects falling wholesale costs—Orlen's wholesale price for Pb95 now stands at 5,548 zł/m³, diesel at 5,793 zł/m³—and the continued effect of the tax cuts.

Regional differences and LPG

Across Poland, average pump prices remain slightly below the caps. According to e-petrol.pl, the cheapest Pb95 is found in the Śląskie and Pomorskie voivodeships at 6.34 zł/l, while Dolnośląskie and Łódzkie see the highest at 6.38 zł/l. Diesel is cheapest in Śląskie and Pomorskie (6.65 zł/l) and most expensive in Łódzkie, Kujawsko-Pomorskie, Zachodniopomorskie, and Małopolskie (6.71 zł/l). Autogas averages 3.62 zł/l, ranging from 3.48 zł/l in Lubelskie and Świętokrzyskie to 3.73 zł/l in Opolskie.

Future uncertainty

The reduced tax rates and the daily price-cap mechanism are set to expire after 31 May. Energy Minister Miłosz Motyka has said the regulations should be extended at least until mid-June, but the final decision will depend on the finance minister's recommendation and the state of the oil market, which he described as "cautiously optimistic." If the caps are not extended, fuel prices could rise as taxes return to normal levels, while the threat of further disruption in the Persian Gulf remains a wild card.