More expensive tickets and garbage are just the beginning. Current price increases 'could be a disaster'

Local governments are starting to feel the effects of the sharp increase in oil and gas prices. The authorities interviewed by the PAP Local Government Service fear that the energy crisis may hit residents through higher public transport ticket prices, and in many communes it will also force adjustments to this year's budgets.

According to the mayor of Proszowice and the president of the Union of Polish Towns, Grzegorz Cichy, the deteriorating situation on the fuel market may lead to an increase in the prices of municipal services and the rates offered by public investment contractors.

– We are afraid that during the execution of orders, the prices of building materials and everything needed for the implementation, e.g. partial renovation of roads or other things, will increase.. Then the question will arise whether it will be possible to annex contracts for these increases in the costs of materials and labor – said the mayor of Proszowice in an interview with the PAP Local Government Service.

According to Cichy, the situation on the fuel price market may also lead to increases in public transport ticket prices.

– If a bus consumes a lot of fuel a day, and for example one bus is worth PLN 1,000 more than it was two months ago, it must be covered by something. This increase is therefore inevitable, said Cichy.

The President of the Union of Polish Towns did not rule out the risk of adjustments in this year's local government budgets.

– Corrections will certainly occur due to the high costs of winter maintenance and necessary repairs of roads damaged by frost. For example, in the Proszowice commune we took out almost one and a half million zlotys in bonds, of which one million will be allocated additionally for the renovation of roads, waterworks and other necessary works – said the mayor.

When asked how to counteract the further effects of increasing fuel prices, Grzegorz Cichy said: local governments should stockpile fuel, and the government should consider temporarily suspending some fees for local governments, such as VAT or excise duty.

– The solution could also be systemic relief for municipalities in waste management, special electricity tariffs for local governments or the possibility of purchasing fuel at a lower price.without the current burdens – explained the president of the Union of Polish Towns.

The Minsk district is already facing the first effects of rising fuel prices. In an interview with the PAP Local Government Service, staroste Remigiusz Górniak informed that the contractor of one of the largest investments in the district recently applied for indexation of the contract. -We will now analyze it – announced the mayor.

He also added that the District-Municipal Public Transport Association of Minsk County decided to temporarily increase the prices of bus tickets on the P13 line. Among the reasons for this decision, Górniak indicated the need to cover the increased costs of operating the line related to the launch of additional routes without funding from the Bus Transport Development Fund and rising fuel prices.

Paweł Kownacki, the mayor of Wieliszew near Warsaw, expects that the increase in oil and gas prices will indirectly affect local governments, including: by increasing prices for garbage collection, renovation and construction services.

– Entrepreneurs taking part in tenders do not have sufficient stocks of petroleum-derived materials to offer us low prices. In the commune alone, we spend about PLN 8 million on road transport (excluding railways), he said.

Price hikes 'could be a disaster'

When asked whether budget adjustments were possible, he emphasized that for many municipalities such increases “could be a disaster.”

– Wieliszew is in a specific situation – we have the problems of a large commune near Warsaw, but also higher tax revenues, which constitute a certain buffer. However, for many other municipalities, such increases could be a disaster. We must remain cautious and wait for the results of the upcoming tenders, which will verify our plans. We cannot rule out the need to change them, said the mayor.

In his opinion, the situation on the fuel market may force ticket prices to increase in some local governments. He stressed, however, that such increases “would not provide much income.”

– In our case, it is often less than 30%. costs. Raising ticket prices in the Warsaw system in which we participate would be difficult to accept in terms of image. More worrying are the hidden costs: waste management, road construction and renovation, and public transport. For example, our garbage fees have increased from PLN 29 to PLN 39 because these costs could no longer be hidden – explained the mayor.

When asked what solutions could help local governments, he pointed to reducing the VAT rate.

– I don't know how much reducing VAT or other fees would affect the state budget, but these indirect fees have a significant impact on the price. However, I think that geopolitics is more important than ad hoc actions, which may only be image-related and bring a difference of several dozen cents. As a resident, and not just a mayor, I would ask the “big players” to be reasonable and not to get us into the problems they cause – appealed Paweł Kownacki.

Michał Rudzki, mayor of Karczew (Masovian Voivodeship), said that the city is currently experiencing an increase in fuel prices mainly in the functioning of municipal units and bus transport.

– Based on the resolved tenders at the moment, we do not see that the increase in fuel prices will affect the increase in offers from potential contractors. However, we expect that the situation may soon change when contractors themselves will receive higher invoices for fuel or energy – said Rudzki.

According to data published by Orlen, since the outbreak of the war in the Middle East at the end of February, wholesale prices of Eurosuper 95 unleaded gasoline in Orlen have increased by PLN 1,267 from PLN 4,466 to the current PLN 5,733 per cubic meter, and Ekodiesel diesel oil by PLN 2,449 from PLN 4,809 to PLN 7,258 per cubic meter. Analysts expect further increases in retail prices.

mc/ mp/ aop/