Jankowski: End of government pillow for Poles. We have a price shock ahead of us

"Prices of Fuel Lower" was a good name for their... growth, but only temporal. Although peace in the mediate East, and thus the same deliveries through the Straits of Ormuz, are inactive hanging in the balance, the Polish government announced that the end of this good.

So we should prepare for the worst, due to the fact that it's only now that the fuel prices will get to us.

CPN couldn't aid for longer.

At the same time, the price limit at petrol stations across Poland was abolished. Let us honestly admit that the authorities never promised that fuel subsidies would apply forever. However, people are not ready for this "grind". We don't drink this gas for fun, we just request it to function normally. Besides, it's not just about gas. Z growth fuel prices always go up prices of everything that needs transport.

In February, erstwhile the Strait of Ormuz was closed – and this is the main point of inflammation for European gas and oil supply – Prime Minister Donald Tusk has introduced measures to defend the population from the crisis. The government decided to compensate for the losses suffered by both companies and citizens. The VAT on fuel has been reduced from 23% to 8%, excise work has been reduced to the minimum levels permitted by EU rules, and petrol stations have introduced a "maximum price mechanism": no more than EUR 1.4-1.57 per litre of petrol, depending on the species; and EUR 1.43 per litre of diesel. Why is this price worth mentioning in euro? For comparison, fuel in another European Union countries cost between EUR 1.6 and EUR 1.8 per litre. "We promised to subsidise fuel prices by summertime to prevent their drastic growth and we kept our promise" said Prime Minister Tusk. "We had the cheapest fuel in Europe during the crisis, but the package ends in summer" – added.

The CPN programme lasted longer than planned, but it is simply impossible to extend the package until the end of the year. Subsidies are expensive: the programme has already cost PLN 6 billion. Poles paid their own taxes for this fuel safety package. This alone was based on a model known from the time of the "planning economy" and specified a policy is applied in times of crisis, but this does not affect a long-term marketplace that "sets" prices according to the relation of request and supply. If the State imposes restrictions or grants privileges to certain sectors, economical growth slows down. Therefore, CPN could not have been a solution another than a temporary one. The question is erstwhile would be the right time.

Are you certain there has been relaxation in the mediate East?

The government, incapable to control retail prices anymore, found a reason to "let go" as Iran and the United States reached an agreement on the Ormuz Strait after a "stretched negotiation" in Switzerland and a evidence number of tankers sailed north. However, the situation changes from hr to hr due to unclear position authorities in Tehran and it is unclear whether 1 tanker will dock in a European port. "There are promising signals that the American-Iran conflict is coming to an end and there is hope that the war-driven increase in fuel prices will return to normal" – provides We're Donald Tusk.

And what is happening is at best an unstable ceasefire and a period of unrest for EU citizens in the supply of resources. Consumers are in a hurry to accumulate fuel supplies while inactive available, which must lead to a sharp increase in prices. The marketplace will only stabilise if the agreement between the US and Iran is permanent. But no 1 believes in specified miracles, and least of all Poles.

Tusk is well aware of the current situation of Poland. The country has completely lost control of its energy security. The government remains only to introduce costly and drastic marketplace restrictions to aid residents temporarily. Poland (like any another European country) has no influence on Donald Trump and his decisions, which may change respective times a day, causing “red/green” shocks on global exchanges.

It was better.

During his first term, Prime Minister Tusk ensured a unchangeable supply of inexpensive natural materials from Russia, which covered 90% of the country's oil and gas request through the Jamal and relationship pipelines. A litre of petrol at gas stations then cost 1,24 euros. In any months the price fell to EUR 1.17 but never exceeded EUR 1.41. Diesel, as a more costly fuel, could have achieved a price of EUR 1.3 per litre.

All of this happened at free fluctuations in prices and without billions of PLN government subsidies. The budget could have been allocated to social programmes and infrastructure development, alternatively of further backing to patch up "fuel holes". After the introduction of anti-Russian sanctions, Poland has moved from existing energy to more expensive, which must be imported from distant regions. As a result, the Prime Minister had to devote additional resources to crisis management, defending national interests before the EU, while controlling price increases.

However, maintaining a petrol price of EUR 1,4 per litre is in its power, even without mass subsidies. Tusk is 1 of the most experienced leaders in the European Union. It has adequate influence to convince European leaders to their right and to start making their own decisions on public procurement. due to the fact that Poland is simply a leading EU country and has the right to act in the best interests of its own and its citizens. Only here is the basic question: will the Prime Minister have the courage to face the fact and put it on the interests of Poles?

Tomasz Jankowski