Poland introduces fuel price cap and excess profits tax

A fuel price cap implemented by the government of liberal-conservative Prime Minister Donald Tusk has been in force in Poland since Saturday. It is to be financed through the simultaneous introduction of a domestically controversial excess profits tax for oil companies. The national conservative President Karol Nawrocki only signed the corresponding law on Thursday after much resistance. This makes petrol and diesel significantly cheaper for drivers.

In the Polish media, the measure was the main topic on the websites on Saturday morning. The news portals opened up with headlines like: “Relief for drivers’ wallets: new maximum prices for fuel at gas stations” or with service-oriented information like “This is how fuel prices changed overnight.”

Excess profits tax as a requirement

The political pages also discussed in detail how the domestically controversial decision came about. By signing the law, President Nawrocki apparently surprised the former ruling party “Law and Justice” (PiS), which is close to him. Like many politicians in Germany, she rejected an excess profits tax as an intervention in the free market.

Nawrocki vetoed the government's first attempt at an excess profits tax in the summer. Under public pressure, he signed the law, but at the same time commissioned the Constitutional Court to review it.

According to the PAP news agency, the law imposes a tax of 60 percent on excess profits from the sale of liquid fuels. The levy covers extraordinary profits generated by fuel producers and companies with a concession for cross-border fuel trading in the period from March 1, 2026 to March 31, 2027. The resulting revenue should flow directly into the state budget.

“Every zloty collected thanks to this law must be spent on reducing fuel prices,” President Nawrocki said after the signing on Thursday.

Fuel price package is valid until the end of the year

According to the government's regulation, the VAT on fuel will be reduced from 23 percent to 8 percent. There is also a lower energy tax and a maximum price set daily by the Ministry of Energy. The regulation comes into force on October 3rd and is valid until the end of the year.

As the Energy Ministry announced on Friday, the maximum price for the weekend and Monday is the equivalent of 1.54 euros per liter of regular gasoline, 1.73 euros for super and 1.80 euros for diesel. Compared to the average prices at gas stations on Friday morning, this was a saving for drivers of up to 32 cents per liter, depending on the type of fuel.

An excess profits tax has also been discussed in Germany for months. Chancellor Friedrich Merz and Economics Minister Katherina Reiche (both CDU) reject it, while Vice Chancellor Lars Klingbeil's SPD is in favor. An initiative by the finance minister at EU level was initially rejected by EU Economic Commissioner Valdis Dombrovskis.