Petroleum price surges pressure Brazil and Portugal fuel policies

Rising international oil prices, driven by geopolitical tensions in the Middle East and attacks on strategic sites in Saudi Arabia, are impacting fuel costs and government subsidies in Brazil and Portugal.

In Brazil, the gap between diesel prices at Petrobras refineries and import parity has exceeded the government subsidy of R$ 3.52 per liter. Analysts warn that maintaining these significant price disparities could prevent Petrobras from adhering to its pricing policy by 2026. The government is currently considering whether to extend a R$ 2.12 per liter diesel subsidy for an additional 30 days.

In Portugal, the government has adjusted the Fuel Product Tax (ISP) to mitigate price volatility. New measures include increasing the tax discount on diesel while reducing support for gasoline. These adjustments aim to return additional VAT revenue collected due to rising fuel prices to consumers. Market forecasts suggest diesel prices may rise slightly while gasoline prices are expected to decrease.