Diesel has risen about 15 cents in three days, but what will fuel costs be without tax cuts?

Diesel rose on Monday, Tuesday, Wednesday … day by day, setting new records. It would be worse if the government had not reduced taxes.And that could happen again next week

Remember the news that diesel reached record highs earlier this week? The same title may have been published in the next two days. This is because prices will continue to fluctuate daily if there is a significant price increase on Monday. In this case, with diesel, they rose daily. In three days, simple diesel was 14.6 cents more expensive. Gasoline 95 was down compared to last week, but only 0.2 cents.

According to official data from the Directorate General of Energy and Geology this Wednesday, Simple diesel costs € 2,039 per liter Mainland Portugal average.already Simple petrol 95 costs € 2,169 per liter..

It turns out that these prices weren’t just higher just because the government reduced the petroleum product tax (ISP) to the equivalent of a VAT cut from 23% to 13%. And you can do it sooner next week.

How much is the fuel cost without the ISP descent?

“The temporary global reduction in tax burden on fuel will be 21.8 cents per liter of diesel and 25.1 cents per liter of gasoline,” according to the latest Treasury statement on the decline in ISPs. This descent will take effect on June 6th and will continue at least until tomorrow. “The current ISP unit price is valid for two weeks and will be readjusted again on June 17,” the Treasury said.

Without this temporary ISP reduction, current prices would be 11% and 12% higher than they are today.

Source: DGEG, Treasury, and unique details CNN Portugal

Therefore, filling a 50 liter diesel tank is 11 euros higher than it is today (12.5 euros higher for gasoline).

Without the decline in ISPs, the increase in diesel and gasoline since the beginning of Russia’s invasion of Ukraine would be about 60 cents per liter... Even without this tax cut, today’s diesel prices are 38 cents higher and gasoline prices are 95 cents higher per liter.

Will the government further reduce ISPs?

Theoretically, that’s right. The latest ISP cut announced on June 3rd was set until tomorrow June 17th. Currently, two facts are at stake.

First, ISP cuts were announced as temporary, lasting only between May and June, and then “soon to be seen.” Soaring fuel prices have not only eased but are worsening, and the government is likely to announce an extension of ISP cuts in the longer term.

Second, as fuel prices have risen further since the last price cut announced on June 3, the government’s logic to replicate the ISP’s cut in response to a VAT cut from 23% to 13% is financial. It suggests that the ministry has announced a further significant price cut. ISP than the one verified today.

In the international market, oil reached $ 125 a barrel on Tuesday (in the Brent index) and fell to about $ 118 on Thursday morning.

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