Portugal Government Reduces VAT on Fuel, Resulting in Minor Reduction in Prices

• Portugal’s government has announced a reduction in fuel prices.
• The reduction is in the form of a two cent per litre reduction on diesel and a one cent per litre reduction on petrol.
• The reduction is being made by returning additional VAT revenue through a discount on the Tax on Petroleum Products (ISP).
• The total ISP discount so far is 15.1 cents per litre on diesel and 16.3 cents per litre on petrol.
• The government is also maintaining the partial suspension of the carbon dioxide emissions surcharge.
• The reduction in applicable taxes amounts to a total of 25.1 cents per litre of diesel and 26.1 cents per litre of petrol.
• The government aims to align fuel taxes in Portugal with the eurozone average while supporting families and environmental objectives.
• Fuel consumption in Portugal has hit a record high for the last decade, with year-on-year growth of around 8%.
• Fuel taxation in Portugal is below the eurozone average, at 6% for diesel and 5% for petrol.
• Agricultural diesel will continue to receive a reduction of six cents per litre to support the sector.

Source: portugalresident.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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