Poland Extends Reduced Fuel Prices Until May 15: VAT 8%, Excise at EU Minimum

Poland has decided to extend the validity of reduced VAT and excise duty rates on gasoline and diesel fuel. These measures, initially set to expire on April 30, will now remain in effect until May 15 of this year. This information was reported by RMF 24, citing a statement from the Polish Ministry of Finance.

The Ministry of Finance explained that the extension is part of a government program aimed at lowering fuel prices and is temporary. In March of this year, in response to the unstable situation in fuel markets caused by the conflict in the Middle East, reduced VAT and excise duty rates were introduced for certain motor fuels. According to the decision of the Minister of Finance and Economy, the VAT rate on gasoline, diesel fuel, and biocomponents, which are standalone fuels, was reduced from 23% to 8% and will be valid until May 15. The excise duty on fuel was lowered to the minimum level permitted by the European Union.

The government program also includes setting maximum fuel prices, with the Ministry of Energy publishing daily updates on working days. It is worth noting that on March 30, a decree came into force in Poland reducing the excise duty on gasoline and diesel fuel due to a sharp price surge linked to the war in Iran.

However, in April, the European Commission sent a letter to Poland stating that the reduction of the VAT rate on fuel contradicts EU law. The EU VAT Directive does not provide for the possibility of applying a reduced rate to the supply of motor fuel. European Union officials urged the governments of EU member states to refrain from excessive state support to compensate for soaring energy prices, warning that the shock from the war in Iran could escalate into a financial crisis.