Unprecedented energy crisis

"Russia has deliberately put Europe in a state of serious energy crisis. Russia is fighting a military against Ukraine, but it has launched its heaviest cannons against Europe, including Poland –: energy, gas and coal," stressed Prime Minister Mateusz Morawiecki.

As he pointed out, the energy crisis requires special mobilisation from public administration – not only from the government, but also from city presidents, mayors, starosts and vogts. "The entire public administration is responsible for ensuring that heat, electricity and coal reach the residents, because we all have a role to play," the Head of the Government explained.

 

Special electricity tariff for local governments

Russia's attack on Ukraine has caused many problems including a sudden increase in electricity prices, which also affects local authorities. Therefore, the government will provide a special tariff for them, which will reduce the proposed price increases.   

"After our changes and subsidies, coming from sources including the state budget, the price will be slightly higher than it was in the second quarter of 2022" – said Prime Minister Mateusz Morawiecki. "The point is that there should not be the 200%, 300%, 400% or even 1000% increments proposed by energy companies" - he explained.

 

Subsidies for local governments for the sale of coal

The Government wants local authorities to get involved in the sale of coal to their residents. "We support local authorities and, with our aid, we also want them to take part in supporting citizens," said the Prime Minister.

The Government’s proposal guarantees that a ton of coal for residents will cost no more than PLN 2,000. In the event of the price of this raw material exceeding this figure, the Government will provide local authorities with special compensation. "The idea is that it will be enough for transport to the place chosen by the local authority as its distribution point" - explained the Head of the government.

 

Almost PLN 13.7 billion for local governments throughout the country

 

Prime Minister Mateusz Morawiecki repeated that in the current crisis the Government does not leave local authorities to fend for themselves. Later this year, local authorities throughout Poland will receive an additional payment approaching PLN 13.7 billion. The relevant regulations have already come into force, and the first tranche of funds will go to local authorities by the end of this week. It will be one third of the total amount (which is PLN 13.7 billion). The next tranches will be paid in November and December.

The minimum amount of co-financing is:

• PLN 2.9 million for each municipality;
• PLN 6.1 million for each county;
• PLN 32.7 million for each voivodeship.

The money can be used for the purchase of energy sources, heat and investments that will improve energy efficiency in the region etc. In practice, this will make it possible to reduce electricity or heat bills, for example. Government funds can also be used to cover current expenses. This is an opportunity for further investments in the region as well as local development.

 

Good financial situation for local authorities

The positive results for local government budgets are the result of the economic situation and the solutions introduced by the Government, which have strengthened and stabilised the finances of local authorities. "The increase in revenues, part of which comes from PIT and CIT for local authorities, has been unprecedented for the last 7 years" - said Prime Minister Mateusz Morawiecki.

This year, local government revenues have increased by an estimated 67% compared to 2015. At the same time, after the first half of 2022, local governments recorded an operating surplus of PLN 20.5 billion. Local government debt is also falling – at the end of the second quarter, it is PLN 3.7 billion less than in the fourth quarter of 2021.

In addition to the revenues that flow into their budget on an ongoing basis, local authorities may also have at their disposal funds left over from previous years. This is almost PLN 52.1 billion.