“We do not have a fixed deadline for the end of the discount” on the Tax on Petroleum Products (ISP)indicated the Minister of Finance in an interview with Jornal de Negócios, partially published this Sunday.
Asked about the European Commission’s (EC) insistence that Portugal end the tax benefit once and for all (in force since 2022, at a time when energy prices soared with Russia’s war against Ukraine), Joaquim Miranda Sarmento indicated that “we will seek, gradually, to reverse this discount, without this having an impact on the final price of fuels”.
That is, “taking advantage of moments of falling crude oil prices, which are reflected in falling fuel prices” to accommodate partial withdrawals of the discount, explained the government official. Asked by Negócios whether the idea is to complete this journey by the end of next year, 2026, the minister replied that “we do not have a fixed deadline either for this gradualism or for the end of the discount”.
Since 2023, Brussels has been insisting on the total elimination of support as it considers it a wrong fiscal policy instrument that encourages the consumption of more polluting fuels. Last June, he sent a letter to the government, returning to the charge.
At the moment, This benefit in terms of ISP reduces, on average, around 12 cents to the final price for each liter of fuel, at the gas pumps. According to the Public Finance Council (CFP), the complete end of the ISP discount would provide a huge income, in the order of one billion euros on the tax revenue side.