Polish cabinet adopts windfall tax on fuel firms to finance retail price relief

Windfall tax adopted by cabinet

On Tuesday, the Polish Council of Ministers adopted a revised draft bill imposing a windfall tax on liquid fuel companies for profits generated between March and December 2026. Prime Minister Donald Tusk announced that revenue from the tax, estimated at 4 billion PLN for 2026, will directly fund price cuts at retail fuel stations. Tusk stated before the cabinet session that fuel relief depends directly on presidential approval.

I guarantee that if the president finally signs the now resubmitted bill on excess profits, immediately after this signature we will implement another variant of CPN, which means lowering fuel prices.

Marshal of the Sejm Włodzimierz Czarzasty scheduled three readings and a parliamentary vote on the legislation for later in the week.

Legislative standoff with the presidency

The revised bill is the government's second attempt to implement a windfall tax on the energy sector. In early July 2026, the Sejm passed an initial version of the law, but President Karol Nawrocki referred it to the Constitutional Tribunal under preventive review in late July. Nawrocki argued that the legislation, scheduled to take effect in August, unlawfully applied retroactive taxation to earnings generated since March.

The presidential referral halted the funding mechanism for the government's fuel protection program, known as Ceny Paliwa Niżej (CPN). Energy Minister Miłosz Motyka stated that the state budget could not sustain fuel subsidies without the windfall levy, leading to the expiration of the CPN framework at the start of September.

Rising pump prices and refinery profits

Government officials attributed upward pressure on retail fuel prices to international geopolitical conflicts, including fighting in the Middle East between the United States, Israel, and Iran, as well as Russia's ongoing war against Ukraine. On NYMEX, West Texas Intermediate crude oil for October delivery rose 1.72% to $103.13 per barrel on Tuesday. In Poland, gasoline prices increased by 17% over the previous month, according to market data. Projections from automotive portal e-petrol indicated that Pb95 could reach 7.99 PLN per litre, while diesel was projected between 8.94 PLN and 9.07 PLN per litre, following an average of 8.75 PLN per litre the prior Wednesday.

Tusk pointed to domestic refining results to justify the tax, noting that PKN Orlen generated 15.8 billion PLN in net profit during the first half of 2026, compared to under 6 billion PLN in the first half of 2025. Tusk explained the dynamic between global disruptions and corporate revenue during his press appearance.

In every fuel crisis we all lose, but fuel companies gain. These profits are extraordinary in nature.

Program mechanics and financial scope

The previous iterations of CPN reduced value-added tax on gasoline and diesel from 23% to 8%, temporarily lowered fuel excise duty, and instituted daily price caps set by the energy ministry. The Ministry of Finance calculated the total cost of prior CPN programs at approximately 5.2 billion PLN, including 495 million PLN spent during a two-week revival between 17 August and 31 August. Tusk also referenced an investigation by the Financial Times reporting that Orlen trading subsidiary OTS lost roughly $230 million during an attempt to purchase Venezuelan crude oil.