Poland cuts fuel VAT and excise taxes to cap weekend petrol at 6.73 zlotys

Price caps and tax cuts

Poland published government regulations on Friday lowering value-added tax and excise duty on motor fuels from 3 October through 31 December 2026. The Energy Ministry issued retail price caps for the weekend and Monday, restricting 95-octane petrol to a maximum of 6.73 zlotys per litre, 98-octane petrol to 7.59 zlotys, and diesel to 7.88 zlotys. The daily ceiling mechanism forms the third phase of the government Lower Fuel Prices (CPN) support package. Energy Minister Miłosz Motyka stated that the measures should allow petrol prices at filling stations to fall by approximately 1.20 zlotys per litre and diesel prices by 1.30 zlotys per litre. In the preceding week, retail costs reached peak levels, with 95-octane petrol surpassing 8 zlotys per litre and diesel exceeding 9 zlotys per litre.

Fiscal impact on state revenue

The regulatory impact assessment estimates the temporary reduction of VAT to 8% will lower state revenue by approximately 3.24 billion zlotys (around 36 million zlotys per day). The fiscal reduction is split across calendar periods, costing the state budget more than 2.12 billion zlotys in 2026 and over 1.1 billion zlotys in 2027. Lowering excise duty rates reduces budget income by an additional 2.1 billion zlotys, divided into 1.4 billion zlotys in 2026 and 700 million zlotys in 2027. Under the updated regulations, the excise tax on petrol falls from 1,529 zlotys to 1,239 zlotys per 1,000 litres, while the rate on diesel and standalone biocomponents decreases from 1,160 zlotys to 880 zlotys per 1,000 litres. Autogas is excluded from the tax reductions and price limits, with industry analysts at e-petrol.pl projecting its price to range between 3.21 and 3.28 zlotys per litre.

Windfall tax legislation and political debate

The tax reductions follow President Karol Nawrocki signing a windfall tax bill on Thursday, published the same day in the Journal of Laws. The legislation imposes a 60% tax on excess profits from liquid fuel sales generated between 1 March 2026 and 31 March 2027 by fuel producers and holders of international fuel trade concessions. The tax base is defined as revenue exceeding historical 2025 margins plus 20%, subject to a minimum 2% reference margin and a 50% net profit cap for non-producers. Nawrocki referred the statute to the Constitutional Tribunal for post-enactment review, after sending an earlier version for preventive review in August. In Dąbrowa Górnicza, Deputy Prime Minister and Defence Minister Władysław Kosiniak-Kamysz welcomed the presidential signature.

The most important thing today is that everyone will have cheaper fuel, that Poles will have cheaper fuel.

Phased rollout of the CPN framework

The current price limits mark the third deployment of the CPN framework in 2026. The initial package operated from late March until the end of June to counter rising oil prices connected to military conflict involving the United States, Israel, and Iran. A second phase followed from 17 to 31 August without excise reductions. The Energy Ministry will release its next price announcement on Monday to fix price ceilings for Tuesday.