Iberian agricultural fuel cost protests

Agricultural producers in Portugal and Spain continue to face economic strain due to rising diesel prices and structural disadvantages.

In Spain, the union Unió de Pagesos, a member of the Unión de Uniones (UdU), is demanding the reinstatement of a 10% VAT rate on agricultural diesel. The union notes that the return to a 21% VAT rate on July 1 has neutralized previous discounts, contributing to a 25% increase in fuel prices compared to levels prior to the Middle East conflict. Farmers warn that these costs may lead to higher consumer food prices and are requesting the application of the minimum special harmonized EU tax.

In Portugal, the Confederation of National Agricultural Cooperatives and Agricultural Credit (Confagri) previously highlighted a discrepancy in agricultural diesel subsidies of approximately 20 cents per liter compared to Spain.

In response to competitiveness concerns, the Portuguese Government has approved extraordinary support, including resuming a 10-cent per liter discount on colored and marked diesel through December. This measure is expected to cost the State Budget more than 15 million euros. However, the Confederação dos Agricultores de Portugal (CAP) has called for significantly higher aid, suggesting between 170 and 200 million euros is required. CAP Secretary-General Luís Mira also highlighted rising fertilizer prices and noted a major disparity in support, stating that while Spain has allocated approximately 1.1 billion euros for fertilizers, Portugal has provided 26 million euros.

Prime Minister Luís Montenegro has since announced the extension of the extraordinary support measure for the agricultural and forestry sectors, providing the 10-cent discount per liter of colored diesel until December 31. The Portuguese government is also considering extending similar support to other sectors, including transport, taxi drivers, firefighters, and social solidarity institutions (IPSS), with decisions expected in the coming week.