Polish drivers once again face the prospect of higher fuel prices, but the government says it is looking for a new, market-based approach to curb the increases. Instead of returning to the CPN package – the earlier price stabilization program – ministers plan to intervene in a way that would lower prices through market mechanisms. This comes as wholesale prices are rising, making it increasingly likely that gasoline and diesel will soon exceed 7 PLN per liter.
Energy Minister Miłosz Motyka confirmed that the government is not considering a return to the CPN package. – Today we are not talking about returning to the CPN package. We are primarily discussing how to bring about lower fuel prices through market mechanisms. What is currently affecting prices at the pumps is the rebuilding of storage stocks and strategic reserves – he said on Radio Krakow.
The minister clarified his earlier statement that the government could reintroduce protective measures if the conflict between the United States and Iran escalates again. Meanwhile, global oil prices and European diesel prices have fallen slightly over the past day, but since the end of the CPN program at the beginning of July, they have risen significantly. Diesel has become 11 percent more expensive in that time.
The end of the CPN package
In the past week alone, Orlen raised wholesale diesel prices by 26 groszy per liter to the highest level in over a month. Gasoline 95 went up by 15 groszy per liter, reaching its highest since late May. With the VAT increase that took effect on July 1, the risk of pump prices clearly exceeding 7 PLN per liter has grown.
The CPN package was a temporary measure that kept fuel prices below market levels. Its end was planned, but the rebound in global commodity prices has made the transition painful for drivers. The government now faces a difficult balancing act: it must not fuel inflation, but it also cannot ignore the political cost of expensive fuel.
Market mechanisms vs. global pressures
Fuel prices are one of those areas where domestic policy has limited effectiveness, because much of the final price depends on global markets. The final liter price includes crude oil cost, refinery margins, taxes (VAT and excise), distribution and retail margins, and the strategic reserve fee. The government can influence some of these components but not all of them.
The declaration about a market-based approach to lowering prices sounds more cautious than a simple protective program. It also reflects the reality that Poland cannot escape global trends. The recent rally in oil and diesel prices is driven by geopolitical tensions and supply concerns, not by domestic decisions.
Still, the government is not helpless. It could adjust the excise tax temporarily or introduce other fiscal measures that would lower the final price at the pump. However, any move that reduces budget revenue must be weighed against the need to finance other public spending. The coming weeks will show whether the new approach can ease the pain for drivers or whether the 7 PLN barrier is inevitable.
Źródło: WNP.PL, Fot. Shutterstock/CatwalkPhotos
