KRAKOW, POLAND - 2022/02/08: A worker loads gas cylinders onto a delivery truck in Krakow.(Photo by ... [+]
A rising inflation rate, combined with soaring energy costs and a shortage of coal, are exacerbating pressures on households in Poland, many of which are already facing a cost-of-living crisis, and leading to warnings that millions could be plunged into energy poverty this winter.
Currently, an estimated 1,6 million Polish households, which account for about 4% of the total population, are energy-poor.
According to analysts, skyrocketing energy bills, which could leave many more struggling to heat their homes this winter, are still an “optimistic scenario” as the country might soon face fuel shortages and blackouts.
Soaring energy prices
Unless the government freezes gas prices, heating a single-family home with the fuel could increase five-fold and reach 25,000 zloty ($5,200) next year, according to an analysis by the Polish energy news portal WysokieNapiecie.pl. The average monthly net salary in Poland is about 4,520 zloty ($950).
The hikes are driven by rocketing prices across Europe due to the ongoing Russian invasion of Ukraine and heightened concerns over gas shortages.
In April, Russia cut off gas supplies to Poland when the country refused Moscow’s demand to pay for them in roubles.
Despite being Europe’s top coal producer, Poland was also heavily reliant on Russian coal for domestic heating before the start of the war.
About 35% of Polish households use coal for this purpose, which generates a demand of around 12 million tonnes per year and places Poland as EU’s leading consumer of the fossil fuel.
However, since Warsaw banned the imports of Russian coal in April, it has struggled to fill the gap. Supplies from far-away destinations, including South Africa and Colombia, are pricier and take longer to arrive.
Even though the government repeatedly claimed it has secured enough imports, consumers trying to stock up ahead of the heating season have been facing long queues at mines and selling points across the country as well as price increases of 300-400%.
According to Łukasz Horbacz, head of the Polish Coal Merchant Chamber of Commerce, 60% of coal-heated households might fall into energy poverty this winter.
Inflation on the rise
The bleak economic situation is exacerbated by a soaring inflation rate which rose to a 25-year high of 16.1% in August.
The price growth has been driven mainly by increasing energy and food costs, which grew 3.7% and 1.6% month on month respectively. According to Bank Millenium, the CPI might still be in two-digit figures in 2023 and its performance would depend on any anti-inflation actions taken by the government as well as any further increases in fuel prices.
Winter of discontent
Although Poland has not seen an organized campaign to forgo paying utility bills, such as Don’t Pay UK which urges consumers to go on a “bill strike” and demand lower price caps, the squeeze on living conditions might be “too much to bear” for many, according to Tomasz Pietryga, deputy editor-in-chief of Polish daily Rzeczpospolita.
He warned that many consumers are worn down by soaring prices, shrinking savings and the uncertainty dominating the economic landscape. Unless the government offers adequate support, an outburst of discontent could provide a fertile ground for extremist movements, he said.
