Curbing energy prices in Poland will cost 50 bln zlotys -PM

Curbing energy prices in Poland will cost 50 bln zlotys -PM

Electric poles are pictured in front of the PGNiG Termika Zeran thermal power station after sunset in Warsaw, Poland June 19, 2019. Picture taken June 19, 2019. REUTERS/Kacper Pempel/File Photo

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WARSAW, Aug 2 (Reuters) – The cost of curbing energy prices in Poland will amount to around 50 billion zlotys ($10.88 billion) and will be financed largely by taxpayers with energy firms also shouldering some of the burden, Prime Minister Mateusz Morawiecki said on Tuesday.

Morawiecki said the total comprised tax breaks, fuel subsidies for households, and other measures.

“The current cost related to fighting inflation, including VAT and excise tax cuts, is around 30 billion zlotys. In addition there is 11.5 billion in coal benefits … Further measures we have talked about will cost around 10-12 billions more,” Morawiecki told a news briefing.

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“So the total cost is around 50 billion zlotys, the total cost of all benefits related to carbons, fuel, heating, coal, pellet and of course gas.”

Morawiecki said large part of the support would come out of the budget but some of the cost would also be absorbed by energy companies through lower hikes in energy tariffs.

Stocks of utilities were down on Tuesday – with the sector’s index losing 2.11% at 1310 GMT.

“Share prices are very sensitive to who will bear the cost of potentially flat tariffs. So of course, any statement that suggests that companies will be payers should be interpreted negatively,” said Pawel Puchalski, an analyst with Santander BM.

The government agreed in July on a one-off payment of 3,000 zlotys to households to help them cover the rising cost of coal amid surging energy prices prompted mainly by the war in neighbouring Ukraine. read more

It is now working on a further support for households that use other fuels such as pellets or heating oil. Morawiecki said he would announce details of the package this week.

($1 = 4.5977 zlotys)

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Reporting by Anna Wlodarczak-Semczuk, Anna Koper, Pawel Florkiewicz and Adrianna Ebert; Editing by Andrew Heavens and Tomasz Janowski

Our Standards: The Thomson Reuters Trust Principles.

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