Poland to cut fuel, energy prices to fight inflation

WARSAW, Poland (AP) — Poland’s Prime Minister Mateusz Morawiecki said Thursday that starting in December the government will cut tax on fuels and on energy and will offer bonuses to hardest hit households next year to counter inflation that has reached its highest level since 2001.

Morawiecki said that the so-called “anti-inflation shield” will cost the government some 10 billion zlotys ($2.4 billion) while additional funds will come from spending cuts.

He blamed the inflation, which was 6.8% in October, year-on-year, on higher energy costs, saying they stem from Russia’s gas policy, the European Union's climate policy and CO2 emission certificate prices, as well as on bonuses that were paid out to help businesses survive the COVID-19 pandemic. Prices have risen on foods, fuels and energy.

“We are offering a large reduction of tax, in order to cushion the effects of the inflation,” Morawiecki said.

He said inflation may still rise in the cold winter winter months of December-March.

On Dec. 20, excise tax on fuels will be cut to 0% for five months to lower prices that have skyrocketed to record levels. VAT and excise tax on gas and energy will be reduced, starting in January.

Some 5 million households are to receive payments of between 400-1,150 zlotys ( $96-275.)

Morawiecki said that Poland also will seek a change on the EU's policy regulating trade in so-called green certificates of carbon emission rights, within the bloc's climate policy.

The Associated Press