Poland prepares new support measures to tame soaring energy costs

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Poland prepares new support measures to tame soaring energy costs

Smoke and steam billow from Belchatow Power Station, Europe’s largest coal-fired power plant, operated by PGE Group, at night near Belchatow, Poland December 5, 2018. REUTERS/Kacper Pempel

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WARSAW, Aug 23 (Reuters) – The Polish cabinet on Tuesday approved a new package of financial support measures designed to shield consumers from soaring energy prices prompted by the war in neighbouring Ukraine.

The measures will compensate households and vulnerable public users including hospitals and schools that use pellets, heating oil, liquefied petroleum gas and wood for heating.

In addition, heating plants will receive compensation in exchange for hiking prices by no more than 40%, while municipalities will get 13.7 billion zloty ($2.86 billion) to help Poles cope with higher energy bills, Prime Minister Mateusz Morawiecki told reporters.

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“Energy security remains the core of our thinking as energy and fuels have become weapons in the hands of (Russian President Vladimir) Putin, but given our good budget balance we’re trying to support everyone,” Morawiecki said.

Russia denies using its oil and gas reserves as a weapon against the West as it wages what it calls a “special military operation” in Ukraine.Polands proposed new measures, which require parliament’s approval, follow one-off payments to households to cover the rising cost of coal. The cost of tax breaks, fuel subsidies for households, and other measures aimed at curbing energy prices will amount to 50 billion zlotys, the government said earlier this month. [nL1N2ZE0YC}Poland, which relies on coal for some 80% of its electricity generation, in April banned imports of coal from Russia in response to Moscow’s invasion of Ukraine.

Over the summer, soaring prices and shortages of coal have become a political issues in Poland, where more than 3 million households use the fuel for heating.

The government will also prepare measures to intervene in the fertiliser market affected by soaring natural gas prices, Morawiecki said, commenting on decisions by producers to cut production.

($1=4.7864 zlotys)

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Reporting by Marek Strzelecki, additional reporting by Anna Wlodarczak-Semczuk and Joanna PlucinskaEditing by Gareth Jones

Our Standards: The Thomson Reuters Trust Principles.

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