The Government has decided to reduce the discount on the Tax on Petroleum Products (ISP) on the day a sharper drop in diesel and petrol prices was announced, expected for next week. A decree published this Friday updates “the unit rates of the ISP on petrol and diesel, promoting the necessary reversal [...]”
Government reduces tax discount on fuels
Friday, 28 November 2025RSS
Context & Explainers
The ISP (Imposto sobre Produtos Petrolíferos e Energéticos) is Portugal's excise tax on petroleum and energy products, charged as a fixed amount per liter on petrol, diesel, and other fuels. It is one of the main components of fuel prices at the pump, alongside VAT and the carbon tax (Taxa de Carbono).
The government can adjust ISP rates — temporarily or permanently — to influence fuel prices. Rate cuts are a common policy tool to ease cost-of-living pressures on drivers and transport businesses, though they also reduce government revenue.
For consumers, the ISP is significant because even small changes in the per-liter rate translate into noticeable differences at the pump, particularly for diesel users and commercial transport operators.
