Energy firms should have “close to zero profits” next year, says Poland’s PM

Energy companies in Poland should have “minimal” profits, “only slightly above zero”, next year amid the current crisis, says Prime Minister Mateusz Morawiecki, who adds that he “will not pity” such firms.

“I am in favour of energy companies having [operating] costs fully covered next year, investment costs also covered, but for their profit to be minimal, precisely because I am on the side of society, of all Poles,” said Morawiecki at a meeting of the Social Dialogue Council, which consists of representatives of workers, employers and government.

“The freezing of energy prices is to lead to a net profit of energy and mining companies only slightly above zero in 2023,” added the prime minister. “I will not pity the energy companies, nor the trading companies nor the distribution companies, nor the generation companies.”

Morawiecki also said that he also wants investments to be “limited to those most necessary for the electricity system”.

The Polish state directly or indirectly has stakes in Poland’s largest energy companies. Four of these firms, PGE, Tauron, Enea and Energa, were responsible for the generation of around 70% of the country’s electricity, according to a report by the Rzeczpospolita daily from 2020.

After the prime minister’s comments on Monday, state-owned energy firms listed on the Warsaw Stock Exchange saw all the gains of the morning wiped out and closed the day with declines of between 7% and 9%. On Tuesday morning, the companies partially clawed back losses.

Tauron‘s stock price on the Warsaw Stock Exchange in the past three days. For stock prices of PGE, Enea and Orlen, click on the respective links.

Like other countries, Poland has seen energy prices soar recently, in particular in the wake of Russia’s invasion of Ukraine. In response, the government has taken steps to shield consumers.

That has included one-off allowances to households for the purchase of fuel for heating this winter as well as various measures to freeze and cap prices of coal, electricity and communal heating systems.

Meanwhile, the profits of energy companies have risen substantially. In the case of PGNiG, which finalised its merger with Orlen last week, net profits doubled to nearly 5 billion zloty (€1.07 billion) in the first six months of the year compared to the same period a year earlier.

Tauron’s profits in the first half of 2022 rose by as much as 65% year on year to 629 million zloty. Meanwhile, Enea’s increased by 15.7% to nearly 861 million zloty in the first six months of the year and PGE’s by 21.6% to 3.31 billion zloty.

Morawiecki said that he had discussed the issue a few days ago with the climate minister, Anna Moskwa, and state assets minister, Jacek Sasin.

“I see understanding on the side of management… The ministry also understands that the profits of state-owned companies should be limited to the necessary minimum. This is what I strongly advocate,” said Morawiecki.

Moskwa, present at the Social Dialogue Council meeting, said that a government decree will determine both the acceptable margins of energy companies and the amount of the investment allowance. “You will know this amount in the coming days,” she added.

Main photo credit: KPRM (under CC BY-NC-ND 3.0 PL)

Alicja Ptak

Alicja Ptak is senior editor at Notes from Poland and a multimedia journalist. She previously worked for Reuters.