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Poland to freeze electricity price for households up to 2,000 kWh consumption

Poland's Turow power plant.
Poland's Turow power plant.

Poland wants to keep electricity prices for households at their current level in 2023, for users with up to 2,000 kilowatt-hours (kWh) of annual consumption, the chairman of the ruling Law and Justice (PiS) party, Jaroslaw Kaczynski, said on September 13.

Like its neighbours, Poland is facing an energy crisis in 2023 because of the expected huge hikes in electricity and heat prices, which have been pushed up by the war in Ukraine. High costs are already seeing local governments roll out plans to save energy by turning off street lighting or lowering temperatures in public buildings. 

On Monday, Czech Prime Minister Petr Fiala introduced capping of  prices for households at CZK6 (€0.24) per kWh of electricity and CZK3 (€0.12) per kWh of gas, which households should see already in their November bills

"We launched actions aimed at [guaranteeing] electricity at a fixed price, in fact at the current price, for each family, each household for up to 2,000 kWh [consumption]," Kaczynski told a meeting with voters in the town of Pruszkow near Warsaw. 

Kaczynski added that around two-thirds of households would benefit from the freeze.

Extra relief would be granted to households that will reduce their electricity consumption by at least 10%, Kaczynski pledged.

The freeze is expected to ease the cost of living crisis for many Polish households, their budgets squeezed by inflation and higher mortgage repayments, an effect of anti-inflation rate hikes by the National Bank of Poland (NBP).

Still, many goods and services will become much more expensive in 2023 as electricity prices for companies or municipalities are set to go up.

It remains unclear what price households will pay for consumption above the 2,000-kWh line. 

They are also in for a price shock once the current circumstances – war and the lingering post-pandemic shortages of goods – subside. That is expected to push the government to bring back the higher VAT rate on electricity, lowered from 23% to just 5% to reduce inflation’s impact.