The Portuguese government has approved a package of measures worth around €150 million per month to offset rising fuel prices linked to the conflict in the Middle East, Prime Minister Luís Montenegro announced following Friday’s Cabinet meeting.
“In total, the measures we are adopting represent around €150 million per month in support in the fuel sector. The financial balance that has guided our policy gives us stronger conditions to face these challenges,” he said.
Alongside the continuation of the existing fuel duty rebate (ISP), the government has introduced a series of additional measures to run for three months, from 1st April to 30th June. These include support for professional diesel used in freight transport, extraordinary aid for the agriculture, forestry, fisheries and aquaculture sectors, assistance for volunteer fire brigades and taxi operators, as well as a one-off payment to private social solidarity institutions.
Montenegro stressed the importance of managing the support “with balance, responsibility and prudence”, given the uncertainty surrounding the duration and impact of the Middle East conflict.
“We must not destabilise the public finances or undo years of collective effort,” he warned. The Prime Minister also made clear that “no intervention at the level of VAT is on the table”, either for fuel or for food. However, he did not rule out further targeted support for households if the conflict persists.
“We are closely monitoring developments. If additional measures are justified, we will introduce them gradually, in line with how the situation evolves,” he said.
Responding to questions about a potential VAT reduction, Montenegro argued that, in the case of fuel, such a move was “not necessary”, as the existing fuel duty mechanism effectively offsets VAT-driven price increases.
“As for the food basket, we do not currently consider that an appropriate measure. There are other possibilities. If we have to act, the likelihood of that being the option is very low and it is not under consideration at this stage,” he added.
The government is also examining further measures that could be introduced in the coming weeks or months should instability in international markets worsen, affecting fuel and other essential goods.
Amongst the measures announced is a 10-cent-per-litre discount on dyed diesel, long demanded by farmers to counter rising costs. The support, to be administered by the IFAP – Instituto de Financiamento da Agricultura e Pescas, will apply in weeks when average prices exceed by 10 cents those recorded in early March, before the first spike.
An additional 10-cent-per-litre subsidy will also be applied to professional diesel used by freight transport vehicles and buses between 1st April and 30th June, up to a limit of 15,000 litres. The measure covers heavy goods vehicles over 35 tonnes and buses with more than 22 seats.
Taxi operators will receive a one-off payment of €120 per vehicle, equivalent to a 10-cent-per-litre subsidy on 400 litres per month.
Volunteer fire brigades will also receive extraordinary support of €360 per heavy vehicle and €120 for other vehicles, reflecting fuel consumption levels equivalent to 1,200 and 400 litres per month respectively.
Source material: DN
