The environmental protection in Poland is far from being perfect. Both its state and legal framework still require improvements. The product tax is considered as one of the measures, which could control fuel and energy system development. It would support the existing environment protection system and allow to influence activities which are not regulated. These are those sectors which up to now have not paid for the pollution they cause, such as households, transport, tertiary sector. The implementation of product tax could be acceptable if the benefits surmount its costs. The benefit which we expect is the decrease of the pollution from fuel use, either through overall decrease of fuel consumption or through changes of fuel consumption pattern, such as the share of clean fuels increase. Revenues for environmental protection funds would constitute the additional benefit. The negative result of the product tax would be the increase of costs for the intensive fuel consumption sectors. The paper analyses the influence of 19 variants of fuel tax on different aspects of Polish economy. The pattern of fuel consumption was analysed for the two most fuel consuming activities - power generation and space heating. Their costs indicated which fuel tax variant could stimulate switching to a different fuel. Th e price elasticities of demand were used to estimate changes of fuels consumption for other sectors. Generally the change of fuels consumption pattern requires high and heavily differentiated taxes. The industry production costs, household budgets and inflation are not expected to be heavily affected by fuel tax. Only the variants of extremely high taxes could substantially deteriorate the above - mentioned factors. The fuel tax would create substantial revenues for environment protection fund which can be later distributed to subsidise environmentally friendly investments. The analysis leads to the conclusion that low tax imposed on those sectors which presently are not environmentally regulated would be most effective. The tax should be differentiated substantially according to pollution caused by particular fuel utilisation. The highest 8% is proposed for high sulphur coal, 4% for leaded petrol while the tax on low - sulphur coal and unleaded petrol would be 4% and 1% respectively. The tax for other fuels ranges from 0.6% to 1% (natural gas).