Fuel prices in Portugal are set to increase again on Monday, with diesel expected to rise by up to nine cents per litre and petrol by up to four cents. Despite the government applying a new discount to the tax on petroleum products (Imposto sobre os Produtos Petrolíferos or ISP), international market volatility continues to drive costs higher. This marks the fifth consecutive week of rising prices linked to the ongoing conflict in the Middle East.

Consumer confidence in Portugal has dropped to its lowest level since December 2023 as the conflict in the Middle East fuels fears of rising prices. Data from the National Statistics Institute (Instituto Nacional de Estatística or INE) shows a sharp decline in economic sentiment across the retail and construction sectors. European Central Bank (Banco Central Europeu) President Christine Lagarde warned that the global energy shock resulting from the crisis is currently being underestimated.

The European Investment Bank (EIB) Group increased its lending to Portugal by 43% in 2025, reaching three billion euros. EIB President Nadia Calviño and Finance Minister (Ministro das Finanças) Joaquim Miranda Sarmento announced that 1.5 billion euros is specifically earmarked for social and affordable housing. Other major investments include nearly one billion euros for the high-speed rail project between Porto and Lisbon. Those seeking affordable housing should note that these funds aim to increase supply across the country quickly.

European Central Bank (Banco Central Europeu or BCE) President Christine Lagarde has promised to do “whatever is necessary” to keep inflation under control. Lagarde noted that while the current situation differs from the 2022 energy crisis, the conflict in the Middle East poses risks to price stability. Taxpayers should be aware that the bank remains vigilant against sudden spikes in energy costs that could impact the cost of living.

The President of the Eurogroup, Kyriakos Pierrakakis, warned that the eurozone must prepare for a prolonged period of economic instability due to the conflict in the Middle East. He noted that while the European economy is resilient, potential disruptions to maritime transport and energy supplies could threaten the 2% inflation target. Residents should be aware that these external shocks may lead to sustained pressure on energy prices and supply chains in the coming months.

The warning was issued by the president of the Eurogroup, Kyriakos Pierrakakis.