The government is increasing the extraordinary discount on the Tax on Petroleum and Energy Products (Imposto sobre os Produtos Petrolíferos e Energéticos or ISP) for both diesel and petrol. This temporary measure, effective Monday, aims to offset rising fuel prices forecasted for the coming week.
Government increases fuel tax discounts to mitigate costs
Friday, 22 May 2026AI summary
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.
