Polish fuel price cap to lower CPI by 0.2-0.3 percentage points, minister says

WARSAW, Oct 5 (Reuters) - Polish government fuel-price cutting measures should lower average annual inflation by 0.2-0.3 percentage points, Finance Minister Andrzej Domanski said on Monday.

Polish President Karol Nawrocki said last week he signed a windfall tax bill, resubmitted by the government, which will be imposed on energy companies, allowing the government to reintroduce a program to lower fuel prices at the pump.

Nawrocki referred the bill to the Constitutional Tribunal for subsequent review, allowing it to come into force.

"Thanks to this program, inflation in Poland will be lower. We are talking about an impact on average annual inflation of around 0.2–0.3 percentage points. In monthly terms, it's a drop of about 0.7 percentage points - which is a very, very large amount," Domanski said during a press briefing.

He added that aside from relief to drivers, the measure also has broad implications for the entire economy, including for consumer confidence.

Asked whether the government could extend the windfall tax period beyond the first quarter of 2027, Domanski said the government would be analysing the situation.

In July, Nawrocki had referred the same bill to the tribunal for preemptive review without signing it, arguing that the new tax applied retroactively and questioned its constitutionality.

A high budget deficit and deteriorating fiscal situation had limited the government's ability to introduce the fuel price easing measures without additional budget proceeds.