Diesel prices in Portugal are set to reach a record high of approximately €2.15 per litre, driven by a forecasted increase of four cents. This surge comes despite a slight reduction in petrol prices due to a minor adjustment in the Petroleum Products Tax discount. The disparity in fuel costs between Portugal and Spain is becoming increasingly pronounced, with Spanish diesel now among the cheapest in the EU following a government discount of €0.20 per litre.
As Portuguese drivers face escalating fuel costs, many are opting to fill up across the border in Spain, where prices are significantly lower. This trend raises concerns about fuel smuggling and the competitive landscape for local retailers. The president of the National Association of Fuel Retailers in Portugal has accused the government of profiting from rising fuel prices, highlighting that a substantial portion of the cost is tax.
The ongoing crisis in the Middle East, particularly the conflict involving Israel and Iran, has further exacerbated fuel price increases, pushing crude oil prices above $100 per barrel. This geopolitical tension is likely to have long-term implications for fuel prices across Europe, affecting household budgets and transportation costs.
With the gap in fuel prices widening, the Portuguese government may need to reassess its tax policies to retain competitiveness and prevent further loss of business to neighbouring Spain. The situation underscores the interconnectedness of regional economies and the impact of international events on local markets.
Source: Euronews
