By the afternoon on Wednesday, the Polish gas giant Orlen had lost around 6 billion zlotys (€1.38 billion) in market value. The fall came after news of plans from the government to freeze electricity, gas and heating prices. An online news service, Wysokie Napięcie, reported that the Orlen group is expected to cover most of these costs.
According to the portal, the incoming government coalition led by Doanld Tusk estimates that Orlen will have to pay around 14.6 billion zlotys (€3.53 billion).
On Tuesday, a group of MPs from the Civic Coalition (KO) and Poland 2050 tabled a bill in the lower house of the parliament, the Sejm, to freeze the prices of electricity, gas and heating for households until the end of June 2024 to protect consumers.
One of the authors of the Civic Coalition’s (KO) economic program, Andrzej Domański, told the Bloomberg news agency that the new levy on Orlen is in line with European Commission regulations on taxes on excess profits. However, Pawel Borys, head of the Polish Development Fund (PFR), believes that taxing Orlen in this way is most likely incompatible with European Union law.
Jacek Sasin, former state assets minister in the PiS government, was scathing about Wednesday’s events on X.
“What a start by the Tusk team and their acolytes. Orlen lost billions today as a result of irresponsible actions of the parliamentary majority. If this is what their asset management is to look like, then hold on to your wallets. It looks like they are lowering the value of assets before selling off the family silver as they have done in the past,” he posted.
Orlen CEO, Daniel Obajtek, took a similar line on X.
“I wonder who wanted to lower the value of Orlen and to destabilize it financially and what the objective of this was. The legislation that has been proposed means Orlen will have PLN 15 billion less to invest in Poland’s energy transformation. First, our opposition attacked Orlen’s merger with Lotus, then it said it wanted to see the company broken up, and now it causes Orlen to lose PLN 5.5 billion in value,” wrote Orlen’s CEO.
Former PiS minister Bartosz Kownacki accused the incoming government of foul play.
“After moves from the parliamentary majority, Orlen share values have plunged, similar to the fall in the value of the copper giant KGHM after Tusk imposed a levy on them in 2011. I wonder if the same people have benefitted from the fall in share prices. I hope the public prosecutors will be on the case soon,” he wrote on X.
Analysts note that Orlen is the second most important company in the Warsaw Stock Exchange and a levy on it will hit the whole of Poland’s stock exchange. The reduction of its value comes in the wake of analysts having felt the company was already undervalued, with the latest plunge likely to spook foreign investors.