The coming week is expected to begin with a historic jump in fuel prices - even larger than the rise recorded in February 2022 after the start of the war in Ukraine, when diesel went up by 14 cents and petrol by eight cents.
Projected diesel and petrol prices in Portugal next week
Sector forecasts point to an increase of 23 cents per litre for standard diesel and 7,5 cents for standard petrol.
If these figures are confirmed, the average price of standard diesel is expected to reach 1,864 €/l, meaning it would become more expensive than petrol, whose average price is forecast to climb to around 1,78 €/l.
How the average fuel price is calculated (DGEG)
Fuel price calculations are based on figures published by the Directorate-General for Energy and Geology (DGEG) - in this case, those referring to last Thursday, 5 March. The values released by the DGEG already include discounts applied by fuel retailers, as well as the Government measures currently in force.
Even so, it is important to note that these are not necessarily the prices you will see at the pump. They are average, indicative figures only. Retailers remain free to set their own prices in line with their commercial strategy.
What is driving the rise?
The increase in fuel prices in Portugal and across Europe is directly linked to escalating tensions in the Middle East, which led to the closure of the Strait of Hormuz, one of the main routes used to ship oil out of the Persian Gulf. Around 20% of global crude trade passes through this corridor.
The effect was felt immediately in the markets: Brent, the European benchmark, rose from roughly 72 dollars per barrel before the offensive and, at the time this article was published, stood at 87 dollars. Analysts warn that prices could reach 100 dollars if the situation continues over the coming days or weeks.
The conflict began last weekend, when Israel and the US launched attacks on Iran, saying they were neutralising imminent threats. In response, Tehran struck US bases and Israeli targets in the region with missiles and drones, deepening instability in the area.
So far, there is no indication of a ceasefire. US President Donald Trump said the offensive would continue “as long as necessary”, pointing to a conflict that could last for several weeks.
Government measures currently in force
During this week, and in light of the forecasts, the Government said it may apply an extraordinary discount on ISP (the Tax on Petroleum and Energy Products) if fuel prices rise by more than 10 cents per litre compared with current levels.
According to the Prime Minister, the aim is to offset the automatic increase in tax revenue from VAT, which always rises when fuel prices go up. Follow this link to see how much the tax discount should be.
Portugal has also maintained an ISP tax discount since 2022, introduced to soften the impact of fuel price rises after Russia’s invasion of Ukraine. This mechanism partially reduced the tax applied to petrol and diesel and has been progressively adjusted in line with price movements.
The European Commission, however, has been urging the country to end these measures, arguing for a gradual return to the normal fuel tax structure.
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