The government will increase tax relief on fuel by 1.5 cents for diesel and 0.85 cents for petrol next week to address rising costs. Despite this adjustment to the Tax on Petroleum Products (Imposto sobre os Produtos Petrolíferos or ISP), diesel prices are still expected to exceed the 2-euro-per-liter threshold.
Fuel tax relief increased to cushion price hikes
Friday, 24 July 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.
