Drivers in Portugal filling up on Monday morning found some relief at the pumps, with petrol prices falling by 9.5 cents per litre and diesel by 9 cents. This marks the most significant drop since March, offering a reprieve after weeks of rising costs linked to geopolitical tensions in the Middle East.
The decline, however, was not as steep as initially expected. According to the Automóvel Clube de Portugal (ACP), petrol should have dropped by 12.5 cents and diesel by 11 cents. The smaller reduction is due to the government's decision to trim the extraordinary discount on the Tax on Petroleum Products (ISP), a move that softened the impact for consumers.
At a filling station in central Lisbon, standard 95 petrol was priced at €1.92 per litre, while special diesel cost €2.13, according to the DGEG fuel price simulator. These figures reflect the partial pass-through of lower international oil prices, tempered by the tax adjustment.
Slow recovery ahead
Energy Minister Maria da Graça Carvalho warned that the downward trend could be slow. Speaking to Rádio Renascença, she noted that while the general direction is positive, external factors such as the destruction of refineries in the Middle East, Russia, and Ukraine will prolong the period of elevated prices. Rebuilding or repairing these facilities will take considerable time, she added.
The ongoing conflict involving the US, Israel, and Iran, including the closure of the Strait of Hormuz and continued attacks on oil tankers in the Persian Gulf, has kept global fuel markets on edge. Although Portugal sources crude from diverse regions—Brazil (42.3%), Algeria (19.6%), Nigeria (10.6%), Azerbaijan (10%), and the US (7.6%)—the minister stressed that fuel prices are inherently global, and no country is insulated from such shocks.
On Friday, Brent crude closed at $98.68 per barrel, down $15.11 (13.32%) from the previous week. By Monday afternoon, Brent was trading around $94.00, suggesting further price reductions may be on the horizon. However, the volatility driven by geopolitical uncertainty means that stability remains elusive.
For Portuguese consumers, the immediate impact is a modest easing of household budgets, but the broader picture remains uncertain. As the EU considers measures like a windfall tax on oil majors to address soaring fuel profits, the situation in Portugal underscores the fragility of energy markets in times of conflict.
While the current drop is welcome, analysts caution that any escalation in the Middle East could quickly reverse the trend. The coming weeks will be crucial in determining whether this marks the beginning of a sustained decline or merely a temporary dip in a volatile market.
