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POLAND: Energy Subsidy Policy

On Friday, Energy Minister Krzystof Tchórzewski announced that the government is planning to introduce a package of energy security solutions for citizens and industrial consumers. The Minister refrained from providing details of government plans. However, daily Rzeczpospolita reports that the government would use funds from the sale of CO2 emission rights to provide for income tax reliefs or direct benefits for citizens. The new policy would alleviate potential hikes in energy prices and decrease the scale of energy poverty.
 
Commercial energy prices, especially electricity, have increased in the past months. Many providers have already announced that they will be applying to the Energy Regulatory Office (URE) for its permission to increase prices for households. PM Mateusz Morawiecki, however, announced that URE is not planning to increase energy prices for households. Additionally, should prices rise, PM Morawiecki suggested government efforts to provide contingency solutions for the energy-intensive industry, as well as SMEs. 
 
Current prices for households will apply until the end of this year, but the tariffs for the upcoming year are set out in December. With the election season in full throttle, a price hike for private consumers may result in a blow for the ruling PiS party’s poll numbers. Still, experts argue that the proposed policy is financially untenable in the long-term, if it is to have any effect. PiS may introduce some interim measures to keep prices for everyday consumers at bay.