Polish daily Dziennik Gazeta Prawna reported on Monday that the European Commission had raised concerns about measures cutting VAT on gas and fuels, which have been extended to the end of 2022.

With Warsaw already embroiled in a dispute with Brussels over the rule of law, Morawiecki said the government would alter its anti-inflation policies from 2023 to avoid another row and would expect energy companies to cover the cost of keeping bills low.

"I am in favour of energy companies next year having their investment costs covered, but their profit should be minimal ... so that it is a zero-plus net profit," he told a meeting of trade union leaders and employers.

Morawiecki did not detail any specific measures to force them to take action, but Poland's utilities are state-controlled, giving the government the power to influence their profits.

At 1017 GMT energy companies PGE, Enea and Tauron were 2.5-4.5% lower on the day, after having traded higher earlier in the session.

Morawiecki said the government would try to keep VAT on key food products at zero.

A European Commission spokesperson did not immediately respond to a request for comment.

The measures cutting VAT on gas, fuel and fertilizer are against European Union regulations, but the bloc had not previously insisted that they be removed.

Adam Antoniak, senior economist at ING, said their removal would generate "substantial savings" for the budget.

The current measures were previously extended to the end of the year. Central banker Ludwik Kotecki said earlier in November that inflation may reach 23-24% in 2023 if the measures were not extended.

Inflation was 17.9% in October according to a flash estimate from the statistics office.

Morawiecki said earlier on Monday that inflation should start to fall at the end of the first quarter of 2023 or in the second quarter.

(Reporting by Alan Charlish, Pawel Florkiewicz, Marek Strzelecki; editing by David Evans)