Tough times are ahead. Get ready for higher bills and more expensive purchases. And it’s starting Monday

Tough times are ahead. Get ready for higher bills and more expensive purchases. And it's starting Monday

The protective shield ends in a few days, which means higher electricity and gas bills and more expensive purchases. Check how these changes will affect your finances.

On July 1, 2024, the protective shield that has protected Polish households against a sharp increase in energy, gas and heat prices for the last two years ends. From July, consumers will have to face higher bills and price increases for everyday purchases, which may mean serious financial difficulties for less wealthy Poles.

More expensive electricity

The Minister of Climate and Environment, Paulina Hennig-Kloska, announced the unblocking of energy prices, which could cause a jump in bills. From July 1, 2024, we will face significant increases in electricity prices. The energy shield, which froze energy prices and introduced energy vouchers, will cease to apply. Although vouchers will remain, they will be available only to the least affluent Poles.

The European Commission’s “National Energy and Climate Plan” report shows that Poland faces serious challenges in energy policy. Forecasts indicate a drastic increase in the risk of energy poverty, which may affect 3.5 million Poles this year. By 2030, this problem may affect up to 11%. Polish households.

The government plans to introduce energy vouchers worth PLN 1.3 billion as support for people most affected by energy poverty. The voucher will be a one-off cash benefit for single-person households with an income below PLN 2,500 a month and multi-person households with an income per person below PLN 1,700. Applications for vouchers can be submitted in municipalities.

More expensive gas

The Ministry of Climate predicts that gas bills may increase by 15% compared to the first half of 2024. This will significantly burden household budgets. PGNiG Obrót Detaliczny, the largest gas seller in Poland, will apply to the Energy Regulatory Office for approval of new tariffs. Until the new tariffs are approved, PGNiG will apply the current price of PLN 200.17/MWh, frozen thanks to the protective shield. Without the shield, prices would be PLN 290.97/MWh.

More expensive purchases

Higher energy and gas prices will translate into higher product prices in stores. Dr. Tomasz Kopyściański from WSB Merito University warns that the increase in energy costs may increase inflation by a point or one and a half percentage points per year. Products that require refrigeration, such as frozen foods, dairy products and carbonated drinks, are most at risk of price increases. In tourist destinations, drinks refrigerators may be turned off to avoid losses.

Since April 1, the government has reintroduced a 5% VAT rate on basic food products, which has already been factored into retail prices. Dr. Kopyściański notes that the current “price war” between retail chains such as Biedronka and Lidl will not last forever. They may soon be forced to raise prices due to rising energy costs.

Hard times are coming

Consumers should brace themselves for higher bills and price increases in stores. Saving energy by using energy-efficient appliances and monitoring usage can help mitigate the impact of the increases. As June ends, it’s worth keeping a closer eye on prices to avoid unpleasant surprises at the checkout.

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