Poland is preparing to return to normal tax rates on fuel as progress in US-Iran talks could reduce risks to the global oil market.
About this informs Bloomberg agency.
Prime Minister Donald Tusk said the government would end the program in the summer. Poland has cut VAT and excise duty on fuel since April to rein in prices amid tensions around the Strait of Hormuz.
The subsidies were supposed to be effective until the end of June and cost the budget about 1.6 billion zlotys, or $436 million, per month. The government has already announced that it will maintain the reduced VAT for the last two weeks of the month, but will not extend the excise duty reduction.
Poland is trying to contain a record budget deficit amid large defense and social spending. Tusk’s cabinet plans to raise an additional 3.8 billion zlotys through a tax on excess profits of oil companies to partially offset the cost of fuel subsidies.
We will remind:
In March Poland significantly lowered fuel taxes, set a price cap at gas stations and introduced a tax on excess profits of energy companies.
