Poland’s latest fuel price relief measures are expected to hold back inflation and prevent a fresh wave of price increases in shops, according to economic forecasts reported by RMF FM.
The third phase of the “Lower Fuel Prices” (CPN) package came into force following the signing of a new windfall tax law by President Karol Nawrocki last Thursday. The legislation, published in the Official Journal the same day, enables temporary cuts to excise duty and VAT on liquid fuels, funded by a levy on fuel companies earning exceptional profits.
According to the government, the entire support scheme will remain in place until the end of the year at an estimated cost of around 5 billion złoty.
Inflation pressures ease but remain above target
Economists believe the package will prevent shop prices from rising further, with expensive fuel having been a key driver of recent inflation, RMF FM journalist Igor Skrzypek reported.
Kamil Pastor, an economist at PKO BP, told internet station Radio RMF24 that lower prices at the pumps should bring inflation down by several tenths of a percentage point.
“If these prices had not been reduced through regulation and administrative action, we could easily have had inflation at 4.3, perhaps even 4.5 per cent in October,” Pastor calculated.
Inflation in Poland accelerated to 4 per cent year-on-year in September, sparking debate about whether the central bank might raise interest rates. However, analysts do not expect the Monetary Policy Council (Rada Polityki Pieniężnej) to increase rates this year, despite inflation sitting well above the National Bank of Poland’s target of 2.5 per cent.
The Council’s next two-day decision-making meeting is scheduled for 6–7 October.
Political context and constitutional challenge
President Nawrocki signed the windfall tax legislation but simultaneously referred it to the Constitutional Tribunal for post-legislative review, raising questions about the law’s future legal standing.
The fuel tax relief scheme marks the government’s third attempt to shield households and businesses from rising energy costs, following earlier rounds of support introduced during the cost-of-living crisis.
What this means for Poles in Poland
The fuel price package offers short-term relief for drivers and should slow the pace of price increases across the economy, since transport costs feed into the price of goods and services. However, with inflation still running at 4 per cent – well above the central bank’s 2.5 per cent target – household budgets remain under pressure.
The relief is temporary and set to expire at the end of 2024, meaning fuel costs could rise again in the new year unless the scheme is extended. For now, analysts do not foresee interest rate rises, which would make mortgages and loans more expensive, but the Monetary Policy Council’s decision on 6–7 October will be closely watched.
Anyone with variable-rate loans, savings or investment decisions tied to interest rates should monitor the central bank’s announcements. Official inflation data is published monthly by the Central Statistical Office (GUS), and NBP policy statements are available on the bank’s website.
