Fuel prices in Portugal jump again on 16 March as diesel and petrol rise

Prices this Monday (16 March)

As signalled late last week, the week beginning 16 March has opened with another steep rise in fuel prices, with standard diesel seeing the biggest jump, according to industry sources.

By the time this article was published on Monday, standard diesel had increased by eight cents per litre, taking the average price up to €1.916 per litre. Standard petrol also moved higher, rising by seven cents per litre to €1.849 per litre.

Adding it up, since the start of the conflict in Iran, standard diesel has already climbed by 28 cents per litre, while petrol has risen by 14.4 cents per litre.

Changes across Galp, BP and Repsol

Looking at the main fuel retailers, Galp, BP and Repsol all put up the price of standard diesel today by nine cents per litre. As a result, the €2-per-litre threshold has been exceeded at all three chains - something that last happened in June 2022.

For standard petrol, the largest increase came from Galp (+7.8 cents), followed by BP (+7.5 cents) and Repsol (+6 cents). BP also raised the price of LPG by 5.5 cents. Following these changes, the posted list prices became: 1.957 €/l at Galp, 1.979 €/l at BP and 1.949 €/l at Repsol.

How the DGEG average is calculated

As usual, the benchmark used to calculate fuel prices is based on figures published by the Directorate-General for Energy and Geology (DGEG). In this case, the reference data are from last Friday, 13 March.

The DGEG figures already reflect the discounts applied by fuel retailers, as well as the Government measures currently in place. Even so, it is worth stressing that these are average, indicative values and may not match the prices shown at individual petrol stations.

What is driving the increase?

The rise in fuel prices in Portugal and across Europe is directly linked to escalating tensions in the Middle East, which have led to the closure of the Strait of Hormuz - one of the most important routes for shipping oil from the Persian Gulf. Around 20% of global crude trade passes through this channel.

The effect was felt immediately in the markets: Brent crude, the European benchmark, climbed from roughly $72 per barrel before the offensive to more than $103 at the time of publication. If the situation does not change over the week, it is expected that fuel prices will continue to rise or remain at this elevated level.

The conflict began at the start of the month, when Israel and the United States carried out strikes against Iran, saying they were neutralising imminent threats. In response, Tehran hit US bases and Israeli targets in the region with missiles and drones, deepening instability.

So far, there is no indication of a ceasefire. US President Donald Trump said the offensive would continue “for as long as necessary”, pointing to a conflict that could run for several weeks.

Government measures currently in force

After industry forecasts pointed to historic increases in fuel prices, the Government strengthened the extraordinary discount applied to ISP (the Tax on Petroleum and Energy Products). As a result, a total discount of 6.1 cents per litre is expected for standard diesel, and 3.3 cents per litre for standard petrol.

This extraordinary reduction in ISP stacks on top of the measure introduced in 2022 to soften the impact of higher fuel costs following Russia’s invasion of Ukraine. That mechanism partially reduced the tax applied to petrol and diesel and has been adjusted gradually in line with price movements.

On the European Commission’s stance regarding this extraordinary discount, Finance Minister Joaquim Miranda Sarmento said the Government had already “informed the Commission” and believes there will be no “objection” to this temporary, exceptional measure. The bloc itself has acknowledged the possibility of “targeted and short-term” steps, arguing that a “price crisis” is being faced.