The new ‘cheap fuel’ law, introduced in April this year amid groans of pain from fuel retailers, dictated that all fuel stations over a certain size must offer low cost diesel and petrol, made cheap by the exclusion of additives.
The savings settled down to between two and three cents a litre with the fuel companies claiming that drivers’ fuel economy would be lower and engine life reduced if they opt for the low cost option.
Paulo Carmona, president of the National Authority for the Fuel Market, claims the new law can yield savings of €200 million a year for drivers and that customers buy on price as they see fuels as being pretty much the same everywhere.
This is why supermarkets have grabbed a big slice of the market in the past, but branded filling stations now are competing on price.
The Portuguese Association of Oil Companies claims that the suggested cost savings are short term as additive free fuel will reduce engine life.
Consumer Protection Association DECO has claimed that fuels with additives are no different to fuels without additives when it comes to consumption and wear and tear on engines.
"There are no differences between fuels except in their price," according to Vítor Machado from consumer watchdog DECO which has complained to trading standard body ASAE that fuel companies were misleading the public in their advertising.
The Minister of Energy, Moreira da Silva launched an awareness campaign in April 2015 to combat the fuel company association’s claim that fuel with additives leads to better consumption figures and longer engine life.
Moreia da Silva says that additives in the more expensive fuels make no difference to engine wear or fuel consumption. If this is so, the basis of fuel companies’ worldwide advertising claims over decades has been one big lie.
In early April, Moreira da Silva said in Parliament that the introduction of low cost fuels represents a potential annual saving of €200 million at current consumption levels, a figure that six months later appears to be on track to be achieved if you believe the suspiciously round figure.
Whatever the case, cheapo fuels are now available in all petrol stations, often saving a long wait in the queue snaking back from the supermarket pumps.
Despite the new competition, Portugal’s supermarkets that sell fuel have increased their market share by between 1% and 1.5%.
The low cost supermarket filling stations now sell 30% of all fuel in Portugal, according to figures released by the National Authority for the Fuel Market.
Despite traditional fuel retailers now selling the cheap stuff, drivers increasingly are choosing the 'low cost' outlets run by supermarket chains in preference to branded fuel retailers.
