Government scraps excise duty on oil imports to fight stubborn inflation

The government has pledged to scrap the 3 and 4% customs duty on gasoline and diesel in the second half of September. The decision is attributed to the government's determination to halt inflation that has soared to a two-year high in recent months. It is believed this will cause the retail price of gasoline to fall by between zl. 0.04 and zl. 0.05 per liter. Analysts are apprehensive about decision saying it was a good plan but too late. Regardless of inflation, the government was obliged by international agreements with the European Union (EU) and by the Central European Free Trade Agreement (CEFTA) to lift excise duty on fuel imports by Jan. 1, 2001. Fuel importers, on the other hand, are of the view that the problem with fuel is not the price but the restrictive system of permits and quotas which makes it impossible for them to buy from a variety of producers thus stifling competition and consequently leaving dominant oil distributor Polski Koncern Naftowy (PKN) Orlen free to manipulate prices. (Rzeczpospolita, page A1, B1)