Why are fuel prices rising?

The Portuguese Association of Petroleum Companies (Apetro) attributes the rise in fuel prices for road use mainly to international prices for petroleum products. This is while the Minister of Economy appears Open to corporate taxation of windfall profits. In the first three months of this year, the share of gas station margins on gasoline increased by 0.3 cents per liter, and tax revenue increased from value-added tax (VAT), although the value of the tax on petroleum products (ISP) has been rejected.

A report on the development of the road fuel market, referring to the first quarter of 2022, released by Apetro on Monday, April 11 reads: “Diesel and gasoline have closely followed the development of Brent crude, and propane is less visible.”

Last Thursday, Economy Minister Antonio Costa Silva admitted… Proceed with an unexpected tax companies, and reinforced on Monday that this hypothesis “There is no drama and nothing new“First of all, we can’t antagonize the companies, but what we are going to do is talk to them and maybe consider introducing a tax, unexpected tax [taxa de imposto sobre lucros que resultam de ganhos inesperados de empresas ou setores específicos]for the random and unexpected profits that they make”, replied Antonio Costa Silva, in response to a question from the left-wing deputy Mariana Mortagua, who wanted to know whether the government would act in relation to the margins of energy companies and “retail companies that raise prices”.

According to an Apetro report, fuel prices for road use in international markets rose as much as 95.3% in the first quarter of this year, year-over-year. These 95.3% refer to diesel, followed by gasoline at 81.4%, Brent crude – the oil traded in London – at 77.4% and finally propane, which is the basis of LPG Auto, at 59, at 2%.

At the pumps, the heights were more modest, though steep. Sales of 95 petrol to the public are up 32.7 cents, diesel 37.2 cents, and LPG 3.1 cents, always comparing this first quarter with its equivalent last year.

Petro says the higher gasoline prices are “mainly due to higher prices,” at 11.4 cents a liter. The cost of incorporating biofuels was reduced by 1 percent per liter (g/L) and storage, distribution and marketing costs (where fuel station margins are included) increased by 0.3 cents per liter. Aptro defends: “They have remained almost the same.”

In the case of diesel, the increase was “as a result of higher prices” of 16.3 cents per liter, plus an additional cost of incorporating biofuels of 0.5 cents per liter. On this fuel, there was a reduction in storage, distribution and marketing costs (ADC) by 1.8 cents/liter.

Low tax weight

Looking at taxes, Apetro detects a downward trend in the tax on petroleum products (ISP), which maintained its value in the case of LPG Auto and decreased, on average, by 0.6 cent/l for 95 petrol and 0.7 cent/l for diesel for road use during The first quarter of 2022, “as a result of government measures to limit the Internet service provider.” Value-added tax revenue increased, reflecting higher average selling prices to the public, although the government decided in March to return to consumers additional revenue commensurate with higher fuel prices.

However, the weight that taxes carry on the final fuel price has fallen: it was 57.4% for diesel in the first quarter of 2021, and it only made up 48% of the pie in the same period in 2022. From 25.9% to 39.5%. In gasoline, the numbers are different but the trend is the same.

Portugal was cheaper than the eurozone in the first weeks of the war

Compared to the average of 19 eurozone countries, gasoline in Portugal was always cheaper between the week of February 28 (shortly after the invasion of Ukraine, which occurred on the 24) and the week of March 21. But since the beginning of the year and again in the last week of March, starting from the 28th, prices are higher in Portuguese territory.

Diesel was more in line with the European average until the week of the war, after which prices in the eurozone extended the distance and were higher than those recorded in Portugal, although in the last week of March they returned to be very close.

With regard to Spain, Portuguese prices were higher by 20.77 cm / liter for gasoline and 0.16 cm / liter for diesel.