Polish cabinet approves 60% fuel windfall tax to fund subsidies

Windfall tax legislation and fiscal targets

On 15 September 2026, the Polish Council of Ministers adopted draft legislation imposing a temporary windfall tax on liquid fuel producers and importers. The proposed levy sets a 60% tax rate on surplus revenue exceeding a baseline determined by the previous year's average sales margin increased by 20%. The government projects total budgetary proceeds of approximately 4 billion PLN, with 3.8 billion PLN collected in 2026 and 200 million PLN in 2027. Under draft project UD470, the measure covers profits earned between 1 March 2026 and 31 December 2026 by domestic refiners and holders of foreign trade concessions. The cabinet aims for the legislation to enter into force on 1 November 2026, requiring expedited consideration by both houses of parliament.

Political conflict over presidential approval

The draft is a second attempt to implement the windfall tax after President Karol Nawrocki blocked an identical bill in late July 2026 by referring it to the Constitutional Tribunal under preventive review. Presidential objections centered on the retroactive taxation of revenues earned before the law's enactment, whereas the government noted that similar windfall measures were enacted in 2022 during the previous parliamentary term. Following the cabinet meeting, government spokesperson Adam Szłapka presented the renewed legislative push.

We believe that these fuel companies should share these profits with citizens, with society, and should be taxed additionally. That is why once again, for the second time, the government has adopted a bill on the windfall tax on energy companies.

Sejm Speaker Włodzimierz Czarzasty stated before the parliamentary session that the bill provides the mechanism to lower pump prices, questioning whether the president would issue a veto once it passes parliament.

Funding the CPN fuel subsidy programme

Budgetary revenues from the levy are designated to finance state support measures under the Lower Fuel Prices (CPN) programme. Previous iterations of the CPN scheme, which ran from late March to late June and again in the second half of August, cost the state budget approximately 4.8 billion PLN, with total expenditures exceeding 5 billion PLN. The intervention reduced value-added tax and excise duty on specific fuels while establishing statutory maximum retail prices set by the Minister of Energy. Prime Minister Donald Tusk tied the future of fuel subsidies directly to presidential assent.

In the first half of the year alone, Orlen had almost 16 billion PLN in net profit, compared to less than 6 billion PLN a year earlier. That is 10 billion more. We would like to tax these profits to have funds to forgo VAT or excise duty.

Fuel market pressures and company earnings

The legislative initiative follows rising domestic fuel prices driven by global crude oil trading above $107 per barrel, linked to the conflict between the United States and Iran and shipping disruptions in the Strait of Hormuz. In Poland, retail prices approached 8 PLN per litre for 95-octane petrol and 9 PLN per litre for diesel. On 15 September 2026, state-controlled refiner Orlen adjusted wholesale prices upward, setting Ekodiesel at 7,388 PLN per cubic metre (up 110 PLN from 12 September) and Eurosuper 95 at 6,395 PLN per cubic metre (up 272 PLN). In the second quarter of 2026, Orlen reported a 25.8% year-on-year revenue increase (up 15.7 billion PLN) and a 54.4% increase in EBITDA LIFO. Reflex analyst Urszula Cieślak forecast that while retail petrol will exceed 8 PLN and diesel 9 PLN per litre, prices are unlikely to reach 10 PLN per litre.