WARSAW: Poland is preparing to restore regular tax rates on fuels as peace talks between the United States and Iran progress, Prime Minister Donald Tusk says.
The country reduced value added and excise tax on fuels starting in April, which allowed petrol prices to stay one of the lowest levels across the European Union throughout the conflict.
The subsidies, which have been scheduled to run until the end of June, were estimated to cost 1.6 billion zloty (US$436mil) a month.
Last Friday, the Polish government said it would keep lower value added tax or VAT rates on the fuels for the last two weeks of the month, while it wouldn’t extend a reduction in excise levy, signalling a gradual wind-down of the programme.
The United States said an interim peace deal that would reopen the Strait of Hormuz and end Iran’s nuclear weapons ambitions looks increasingly likely and could be signed within days.
Tusk said that signals fuel prices could return to “normal levels”.
“We’ve assumed that we would subsidise fuel prices until the summer so that they don’t shoot up,” Tusk said in a press conference in Lomza.
“We kept that promise, which allowed us to have the lowest prices in Europe, but we’ll be ending this project now, in the summer.” — Bloomberg
