If there is one area where Portugal is nowhere near the “tail of Europe”, it is fuel pricing: our country sits among the most expensive in the “Old Continent”, whether you are buying petrol or diesel.
By the end of February, Portugal had the fourth most expensive petrol in Europe, the result of a price surge that has been unfolding since the start of 2021.
Rising fuel prices since 2020
Calculations published by Jornal i indicate that, this year, petrol has already risen by 11 cents, while diesel has increased by 9.1 cents. In other words, across the first nine weeks of the year the price of petrol climbed every single week, and diesel broadly followed the same path-the only exception being the first week of February, when diesel became cheaper.
Looking further back to 2020, the upward pressure has been felt for 17 consecutive weeks (!), with that same diesel dip standing out as the only break in the sequence.
Why do we pay so much?
As you know, what you pay per litre is shaped by several factors. Some are outside Portugal’s control and are linked to the international price of crude oil, with the Brent barrel serving as the benchmark.
On top of that, your fuel bill also includes fixed costs for fuel storage and distribution, as well as the cost of blending in biofuels (the percentage is shown on the receipt you receive when you fill up).
Even so, it is the “the State’s slice” (aka the tax burden) that pushes fuel prices in Portugal towards the top end of what is charged in Europe (and makes them notably higher than, for instance, the prices in Spain).
Taxes on fuels account for 60% of the final retail price. That means that for every 100 euros you spend on petrol, 60 euros go straight to the State.
Alongside standard VAT (Value Added Tax), fuels are also subject to the Tax on Petroleum Products (ISP), which is why the overall tax component reaches 60%.
How do we compare with Europe?
According to data published by the National Entity for the Energy Sector (ENSE), on 22 February 2021 petrol 95 in Portugal cost, on average, 1,541 €/l, while standard diesel was priced at 1,386 €/l.
Petrol 95 prices in Europe
Over the same period, across the European Union and including Switzerland and the United Kingdom, only the Netherlands, Denmark and Greece had more expensive petrol than Portugal. In the Netherlands it reached 1,674 €/l, in Denmark 1,575 €/l and in Greece 1,557 €/l.
By contrast, countries such as France (1,470 €/l), Germany (1,351 €/l), the United Kingdom (1,417 €/l), Spain (1,269 €/l), and even Luxembourg (1,222 €/l) and Switzerland (1,349 €/l) all recorded cheaper petrol than in Portugal.
Bottled gas prices
Finally, even bottled gas costs more in Portugal than in other European countries: the cylinder is priced at 26 euros in Portugal, while just next door in Spain it comes in at 13 euros.
Source: Jornal i.
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