The Polish government's program to cap fuel prices at the pump is enticing drivers from nearby countries to cross the border and fill up with the some of the cheapest petrol in the European Union.
The trend was first spotted by economists at PKO Bank Polski SA, the country's largest lender, after Polish retail sales figures on Monday showed a 13.4% constant-price rise in fuels in April versus March. The data didn't gel with the bank's own data, which showed virtually unchanged personal-card transactions at filling stations last month.
The fuel-sales jump “was likely due to increased demand from businesses or foreign entities,” said the economists, led by Piotr Bujak. “PKO customers' card spending at gas stations remained stable in this period.”
Photo Credit: Bloomberg
From the start of April, Poland cut taxes on fuels and introduced a daily cap on prices at the pump to shield consumers from the energy-price fallout of the war in Iran. Finance Minister Andrzej Domanski said on Monday that Poland would most likely extend the program into June.
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The policy costs the Polish tax-payer an estimated 1.6 billion zloty ($440 million) per month. A liter of Eurosuper 95 petrol cost an average of €1.49 ($1.74) last week, the least in the 27-member EU after Malta, according to latest data from the bloc's executive.
Orlen SA, Poland's largest fuel retailer, said its overall sales haven't been impacted significantly by petrol tourists and that it will discuss trends in more detail after publishing first-quarter results on May 28.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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