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POLAND: Last Sejm Session of 2018

The last parliamentary session in 2018 saw a hasty legislative process that was meant to prevent price hikes for electricity in the new year. On Friday, the Parliament passed an amendment bill that mainly dealt with excise tax, which was signed by the President on the following day. As reported in the 24.12 CEC Daily, the excise tax for energy will be reduced from PLN 20 per KWh to PLN 5 per KWh. Similarly, the so-called interim fee (part of Poland’s participation in the EU-wide policy to promote energy modernisation) will be reduced by 95%. Importantly, energy sale and distribution prices will be frozen at certain 2018 levels. For this, energy companies will be recompensed through the newly-established Price Difference Pay-out Fund (Fundusz Wypłaty Różnicy Cen). Experts estimate that the government will have to provide PLN 9 billion for the project.

The bill is meant to come into force on January 1st 2019. There are doubts, however, on whether the new law adheres to regulations on public aid. While the Energy Minister Krzysztof Tchórzewski argued that the bill will not encounter roadblocks, talks with the European Commission are likely to take place soon. The ruling PiS party has argued that growing energy prices were caused by the policies introduced by the PO-PSL government. On the other, hand the opposition has argued that PiS’ solution is not permanent, and that growing prices are a result of an energy system based on coal, with PiS failing to reform the system quickly enough. Growing energy prices have become one of the main political topics at the end of 2018. On one hand, many have argued that PiS will lose votes due to growing prices. On the other, the media have reported on conflicts within the cabinet on the issue. The beginning of 2019 will show whether PiS has contained the crisis, or whether it will carry on as a significant part of the year’s elections campaigns.