Portugal faces sharp fuel price hike: diesel and petrol to rise from Monday

According to the Automobile Club of Portugal (ACP) and the Directorate-General for Energy and Geology (DGEG), fuel prices are set to rise sharply next week, from 20 to 26 July. Diesel will increase by 13.5 cents per litre and petrol by 6.5 cents per litre. This means consumers will pay €1.988 per litre for diesel and €1.980 per litre for petrol.

The ACP notes that the average figures are based on raw material prices at the close of markets last Thursday, but warns that fluctuations in crude and fuel quotations may occur until Friday. The war in the Middle East, involving the US, Israel and Iran, continues to drive prices higher. The Strait of Hormuz, through which 20% of global trade in oil and natural gas passes, was closed after the US and Israel launched their war against Iran on 28 February, sending prices for oil, fertilisers and other goods soaring far beyond the region and giving Iran significant leverage in negotiations. This week saw an escalation in fighting between the two sides, ending a provisional agreement to halt the war against Iran.

The government has pledged to apply an extraordinary, temporary reduction in the Tax on Petroleum and Energy Products (ISP) whenever there is an increase of more than 10 cents. Meanwhile, according to the Expresso newspaper, on Thursday the Minister for the Environment and Energy, Maria Graça Carvalho, sent a request to ERSE for an investigation into fuel prices charged by retailers since 2024. In the letter, she called for “a detailed study of the last two years – within 20 days – to explain why falls in oil prices on international markets take so long to be passed on to prices at the pump”. Cutting VAT on fuel has been a subject of intense debate, but Finance Minister Miranda Sarmento insisted during Wednesday’s debate that he will not change the tax rate.