Petrol and diesel prices in Portugal are set to increase significantly during the week of July 20 to July 26. The price of diesel is expected to rise by 13.5 euro cents per litre, bringing the total to €1.988, while petrol will increase by 6.5 euro cents per litre, reaching €1.980. These forecasts were provided by the Automóvel Clube de Portugal (ACP) and the Directorate-General for Energy and Geology (DGEG).
Key Details
The anticipated price hikes are attributed to ongoing geopolitical tensions, particularly the conflict involving the United States, Israel, and Iran. The war has disrupted oil supply routes, notably through the Strait of Hormuz, which is crucial for global oil and natural gas trade. The ACP noted that the average price figures are based on raw material prices as of last Thursday, but fluctuations may occur before the weekend.
Background
In response to rising fuel costs, the Portuguese government has indicated it will implement an extraordinary and temporary reduction in the Tax on Petroleum and Energy Products (ISP) whenever price increases exceed 10 cents. Additionally, Environment and Energy Minister Maria Graça Carvalho has requested the Energy Services Regulatory Authority (ERSE) to conduct inspections of fuel prices at petrol stations, seeking an explanation for the delays in reflecting international oil price decreases at the pump.
The increase in fuel prices is likely to affect consumer spending and inflation in Portugal, particularly in the transportation and logistics sectors. Higher fuel costs could lead to increased prices for goods and services across the economy. Investors will watch for any government actions regarding fuel taxation or further measures to mitigate price impacts on consumers.