The Government confirmed the end of the extraordinary discount applied to the Tax on Petroleum Products (ISP), a measure that, since 2022, had helped to halt the rise in gasoline and diesel prices. The decision marks the return to normal taxation on fuels and should be reflected in drivers’ wallets in the coming months.
According to Ekonomista, a website specializing in economics and finance, the end of the discount will be gradual but inevitable. The support was introduced two years ago to compensate for the sudden increase in the price of oil, which, at the time, exceeded 120 dollars per barrel.
With the value currently around 60 dollars, the Government considers that the international context is more stable and that there is no reason to maintain a measure of an “exceptional” nature.
European pressure and environmental objectives
The withdrawal of tax benefits does not just happen by internal decision. The European Commission has been demanding the end of temporary support for fossil fuels, considered incompatible with the environmental goals established by Member States.
In line with this guidance, Portugal is now beginning to dismantle the incentives that reduced the tax burden on gasoline and diesel.
But there is also a budgetary motivation. According to the Public Finance Council, the State will be able to raise more than 1,100 million additional euros with the end of the discount, as early as 2026.
This budgetary slack could be used to finance other public measures, although it represents an increased expense for drivers.
How much will fuel prices rise?
Estimates point to average increases of around 25 cents per liter in 95 gasoline and 17 cents in diesel, if the reversal is complete. The Executive insists that the withdrawal will be done “in a phased manner”, in order to mitigate the direct impact on consumers.
Even so, Portuguese drivers will continue to be among the highest paid in the European Union. According to the Energy Services Regulatory Authority (ERSE), more than half of the final price of fuel in Portugal corresponds to taxes, which keeps the country above the European average.
How to deal with the increase
Faced with this new reality, experts advise planning the family budget and reviewing consumption habits.
The recommends monitoring prices and refueling during periods of lower international prices, in addition to considering mobility alternatives such as public transport or car sharing.
The end of the ISP discount marks the return to fiscal normality, but also the beginning of a more demanding phase for those who depend on their cars on a daily basis.
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