Polish drivers face sharp fuel price increases as the government rules out reviving the CPN subsidy program, citing a strained budget with a deficit of 123.7 billion złotys. Prime Minister Donald Tusk stated bluntly that the state cannot indefinitely cushion consumers, while inflation risks return as Brent crude climbs above $90 per barrel.
Fuel prices at Polish stations are rising rapidly. According to Biuro Maklerskie Reflex, 95-octane gasoline may increase by another 21 groszy to 7.30 złoty per liter, and diesel by as much as 57 groszy to 7.90 złoty. Both fuels have already exceeded 7 złoty, the highest since April for diesel and March for gasoline. In wholesale, 95-octane is at its most expensive since December 2022, signaling further retail hikes.
The price of Brent crude returned above $90 per barrel after a month and a half, driven by renewed US-Iran tensions and the closure of the Strait of Hormuz. Additionally, Russia’s ban on fuel exports reduces global supply against steady demand, pushing prices up faster than crude alone. Since the end of the CPN program in late June, Brent has risen 24%, while wholesale gasoline at Orlen increased by 11% and diesel by 15%.
Budget constraints force end of fuel subsidies
Prime Minister Tusk made the government’s position clear: – We cannot endlessly spend from the budget to keep fuel prices low. The budget’s resilience also has its limits – he said during a Friday briefing. Finance Minister Andrzej Domański added: – Poland currently has a high budget deficit, which is linked to our enormous defense spending.
The previous CPN package cost approximately 4.7 billion złoty. June budget data showed a nearly 9% drop in VAT revenues year-on-year, partly due to the subsidy. The deficit after six months of 2026 stands at 123.7 billion złoty. A return to subsidized fuel prices appears unlikely. The government may pressure Orlen’s pricing policy, but for now, the market and drivers bear the burden.
Inflation risk looms as oil and fuel prices surge
Inflation measured by the harmonized HICP fell to 3% year-on-year in June, down from 3.3% in May, bringing Poland close to the EU average of 2.9%. However, the June data do not account for the recent surge in oil and fuel prices, nor the full effect of the CPN program’s end. This creates a risk that the July reading may be higher, even if core price pressures continue to ease.
The European data shows that the decline in inflation was largely due to a reversal of earlier fuel shocks. In the eurozone, energy was still 8.5% more expensive than a year ago but fell 1.8% month-on-month. With Brent above $90 and diesel rising sharply, fuel could become the main driver of higher inflation in the coming months.
Brussels offers industrial relief but ties it to green investment
The European Commission proposed a reform of the Emissions Trading System (ETS) aimed at balancing climate goals with industrial competitiveness. The plan includes increasing free allowances for energy-intensive industries by about €6 billion by 2030, and slowing the phase-out of free allowances under the CBAM until the end of 2037. However, from 2031, free allowances will be conditional on approved decarbonization investment plans. Companies must invest at least the value of the allowances received and demonstrate significant emission reductions.
For Poland, this is a favorable correction given its higher emission intensity. The government welcomes the proposal but will push for even slower allowance reductions. The risk remains that more time could delay modernization. The Commission did not propose changes to the ETS2 system, which will raise fuel costs for transport and heating. The National Bank of Poland estimates that ETS2 could add up to 2 percentage points to inflation in 2028.
Separately, the government is preparing controls on wages and working time in healthcare, aiming to curb abuses and improve transparency. Meanwhile, SpaceX’s market value fell by over $1 trillion in a month, as the Nasdaq corrected and investors questioned AI investment returns.
Źródło: WNP.PL, Fot. Andrzej Jackowski/PAP
