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The price of diesel is expected to rise slightly in Portugal at the start of next week, according to forecasts from the National Association of Fuel Retailers (ANAREC), while the price of petrol is set to fall. However, the increase is being offset by changes to the discount on the Petroleum Products Tax (ISP) announced by the Portuguese government on Friday evening.
The new rates unveiled on Friday effectively raise the tax on petrol by about one cent per litre, meaning the price of a litre of 95 unleaded petrol should fall by around five cents on Monday, instead of the six cents previously forecast.
The price of diesel, meanwhile, is set to continue breaking historic records. The increase in the tax discount announced by the government is very small, at only around 0.10 cents, leaving virtually unchanged the forecast rise of four cents per litre. As a result, the indicative price of a litre of diesel is expected to reach about €2.15 from this Monday, a new all-time high.
ANAREC president João Durão accuses the government of “lying” to Portuguese people when it says it is not profiting from rising fuel prices.
Spanish government introduces €0.20 discount
Speaking to journalists at a petrol station in Caminha, in Alto Minho near the Spanish border, the head of the main industry association said the government would have to take action against what he described as “fuel smuggling from Spain”, where fuel is 30 to 40 cents per litre cheaper, and warned of the loss of competitiveness this is creating. He insisted that, contrary to the government’s claims, the state is profiting from the rise in fuel prices, since “out of one euro spent on diesel, 60 cents are taxes” and “in Spain that is not the case”, in his words.
In fact, more and more Portuguese drivers are filling up on the other side of the border. Unlike in Portugal, fuel prices in Spain are among the lowest in Europe.
That gap has widened further with the introduction of a discount of 20 cents per litre, brought in last week by Pedro Sánchez’s government to counter the impact of the price rises.
Previously, seven countries had cheaper diesel and petrol than Spain, but now only Malta manages to offer even lower prices. Spain now has the second-cheapest diesel in the European Union, at €1.795 per litre. Malta has the lowest prices, followed by Spain, Bulgaria and Hungary. In the case of the Mediterranean island nation, prices have been frozen by the government since 2020 at €1.34 per litre of petrol and €1.21 per litre of diesel.
At the other end of the scale, it is in Finland that motorists pay the most for a litre of diesel (€2.477), followed by the Netherlands (€2.442), Denmark (€2.434) and Germany (€2.328).
The Middle East crisis triggered by the war launched by Israel and the US against Iran in February, and the resulting blockade of the Strait of Hormuz, has been pushing oil and fuel prices to record highs. The price of crude oil has recently risen above 100 dollars per barrel.