Poland caps fuel prices and lowers taxes after president approves windfall energy levy

Regulated fuel price ceilings

Poland is reinstating its fuel price intervention on Saturday, 3 October 2026, setting mandatory price ceilings at petrol stations across the country. Energy Minister Miłosz Motyka announced that maximum retail prices from 3 October to 5 October will be 6.73 zlotys per litre for 95-octane petrol, 7.59 zlotys for 98-octane petrol, and 7.88 zlotys for diesel. Prior to the price cap, average prices on 30 September reached 8.19 zlotys for Pb95 and 9.14 zlotys for diesel, representing reductions of 1.46 zlotys and 1.26 zlotys per litre respectively. The ceilings are enabled by lowering value-added tax from 23% to 8% and reducing fuel excise duties. Daily price updates will follow from Monday to Friday throughout the duration of the program.

The government did everything possible so that this shield program functions effectively and so that these prices are as low as possible.

Cross-border disparities and LPG exclusion

The price controls place Polish retail petrol rates below those of neighbouring European countries. When converted to euro values, the Polish 95-octane ceiling equals approximately 1.54 euros per litre, compared to late September averages of 1.75 euros in Ukraine, 1.85 euros in Slovakia, 1.88 euros in the Czech Republic, 1.95 euros in Lithuania, and 2.35 euros in Germany. Polish diesel under the cap sits at roughly 1.80 euros per litre, lower than Slovakia (1.98 euros), Czechia (2.08 euros), Lithuania (2.25 euros), and Germany (2.44 euros). However, the intervention excludes liquefied petroleum gas (LPG). Industry figures from e-petrol.pl show LPG prices rose from 3.08 zlotys on 16 September to 3.14 zlotys on 23 September and 3.22 zlotys on 30 September, with further increases expected due to Middle Eastern supply chain rerouting.

Fiscal costs and windfall tax funding

The price shield relies on a newly approved windfall tax on excess profits of oil and gas companies, signed by President Karol Nawrocki after an earlier draft was submitted to the Constitutional Tribunal in the summer. Nawrocki accompanied his signature with a post-enactment review request to the tribunal, defending the corporate levy while arguing that individual motorists should not bear fiscal strains.

A citizen cannot be a hostage and an ATM for the rulers, and I will not allow the government's financial catastrophe to be patched with funds taken directly from citizens' pockets.

Official regulatory impact assessments calculate the total cost to the state budget at approximately 5.4 billion zlotys through 31 December 2026. The temporary VAT reduction accounts for about 3.24 billion zlotys (roughly 36 million zlotys per day), while excise cuts total 2.10 billion zlotys. The windfall tax is projected to generate 4 billion zlotys, leaving a fiscal gap noted by PKO BP economists.

Central bank rates and inflation expectations

Poland's annual inflation rate accelerated to 4.0% in September from 3.4% in August, driven by a 36.1% year-on-year surge in fuel costs. The newly established caps are projected by bank analysts to trim headline inflation by 0.6 to 0.7 percentage points, bringing October price growth down to between 3.5% and 3.7%. With inflation moving closer to the central bank target range, pressure on the Monetary Policy Council to tighten borrowing costs has diminished. The National Bank of Poland held its key reference rate at 3.75% in September, with economists at ING now anticipating that rate hikes will be deferred until the first quarter of 2027.