Portugal fuel prices face volatility amid political VAT debate

Fuel prices in Portugal are expected to fluctuate next week, with diesel projected to rise by approximately 4 cents per liter, potentially reaching a record high of €2.15. Conversely, gasoline prices are estimated to decrease by about 5 to 6 cents per liter. These shifts follow government adjustments to the Fuel Product Tax (ISP), where the discount for diesel will increase slightly while the discount for gasoline will be reduced.

The price volatility is influenced by international market tensions, particularly regarding the conflict involving Iran and the Strait of Hormuz.

Politically, the fuel situation has sparked intense debate. José Luís Carneiro, Secretary-General of the Socialist Party (PS), accused the Chega party of attempting to “deceive the Portuguese” regarding VAT reductions on fuel, noting that Chega had previously voted against PS proposals for lower rates. In response, Chega leader André Ventura challenged the PS to approve a project to reduce fuel VAT from 23% to 13%. Meanwhile, industry representatives from ANAREC have criticized the government for failing to lower the tax burden, arguing that high taxes are impacting competitiveness compared to Spain.