The temporary discount on the fuel tax (ISP) was due to end on January 31 but, according to ECO, the Government has decided to extend its validity. The renewal of the decree in question was decided by the Ministry of Finance and should be published soon in the Diário da República so that this temporary decrease introduced in October can extend beyond January.
"In the analysis of the Government, the assumptions that led to the adoption of this measure remain, so the measure should remain in force beyond January 31", revealed the Secretary of State for Tax Affairs, António Mendonça Mendes, in an interview with ECO.
At issue is Ordinance No. 208-A/2021, which gave a discount of two cents per litre in the case of gasoline and one cent per litre in the case of diesel. In that ordinance, the Government introduced this discount “in order to ensure that the additional gain in terms of VAT arising from the increase in fuel prices is fully returned to consumers through the proportional reduction of the ISP unit rates“.
However, the ordinance defined that the application of the discount ended on 31 January, pointing to adjustments according to the evolution of oil prices in international markets. “Without prejudice to predicting, at the level of oil price futures markets, a decrease in the price of raw materials in the short and medium term, the measure now taken will be the object of constant monitoring so that it is adjusted according to the evolution of the market", said the Government.
As there has not been a significant drop in fuel prices for consumers – in January they even went up –, the PS Executive has decided to keep this temporary discount, which accumulates with the direct subsidy to citizens through the AutoVoucher (effective until March).
According to the Government's accounts, €63 million would be refunded to consumers, returning the additional VAT revenue in the form of a discount at the ISP.