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POLAND: Lower excise tax on energy

On Friday PM Morawiecki announced again that energy prices will not rise in 2019. The government has submitted a new bill to the Sejm, which reduces excise tax for energy from PLN 20 per MW to PLN 5 per MW. Moreover, the government plans to reduce the so-called interim fee by 95% – this payment is an aftermath of Poland’s pre-EU energy market, which was subsidised to facilitate modernisation. The lowering of excise tax on energy is expected to neutralise the price increase anticipated from major energy companies. This, however, is only likely to work in the short-term. Previously, commentators suggested that a new bill, which would prevent state-owned energy providers from increasing energy prices was planned – this remains unconfirmed. Upon request of PM Morawiecki, MPs and Senators are expected to meet on 28 December to discuss the planned bill – the government would see it passed by both chambers prior to the end of year.  Additionally, PM Morawiecki and Energy Minister Tchórzewski, in suspicion of price meddling on the TGE energy market, have ordered audits of all energy companies but little official explanation has been provided.

With days until the end of year, the government is under heavy pressure to resolve the matter of energy prices. Politically, this issue is of paramount importance to the government and the ruling party – especially with the ensuing election season. Energy poverty in Poland is currently decreasing, but still affects 4.6 million people. A rise of energy prices may negatively affect this positive trend. Consequently, the ruling party’s support may diminish as voters will view this as the government backing out of its earlier promises. It is increasingly apparent that tensions surrounding this issue , also within the government, are growing. The outcome of this situation will be a test of unity for the ruling party and the government, but it may also determine the fate of Energy Minister Tchórzewski.