By Andrea Hargraves 
Initial estimates indicate a sharp drop in fuel prices next week, which will come down with this change.
The government will unfreeze the carbon tax, which has been unchanged since 2023. It comes on the eve of a week in which diesel and petrol prices are expected to fall the most in 25 and 33 weeks respectively.
News provided by Prefix meaning environmentWhich explains why the government has decided to cancel this measure, which is still being implemented by CEO Antonio Costa, in January 2023. The decree was published on Friday in the Diário da República.The government says that, taking into account “the trend towards lower fuel prices and the increasing trend in CO2 emissions prices,” it has decided to resume “the gradual removal of the freeze on the CO2 emissions supplement update, while maintaining a partial level of CO2 emissions.” This update will be suspended compared to the €83.50 value that will apply in 2024.
“Thus, in addition to resuming the goal of promoting green taxes and decarbonizing energy, this phasing out of the CO2 emissions add-on update reconciles environmental protection with the energy support needs of households and businesses,” he added.
The change comes into effect on Monday and will have an impact of about three cents, meaning the expected fall in fuel prices next week will be 0.5 cents for diesel and 1.5 cents for petrol, contrary to initial expectations that fuel prices would fall sharply by 4.5 cents per litre for petrol and 3.5 cents per litre for diesel.
Gasoline prices have not been this low for at least 33 weeks; diesel prices were 25 weeks ago. However, with the carbon tax freeze lifted, fuel prices will naturally rise.
In January last year, the carbon tax update was curbed by an additional 13.4 cents per litre discount on diesel and 12.2 cents per litre on petrol, compared to the carbon tax which will be determined based on developments in European greenhouse gas emission allowance auctions.
But in May, the government wanted to start unfreezing the rate, citing environmental concerns. So the latest update came into effect in August last year, exactly one year ago, with a 2 cent increase in diesel and 1.8 cents on petrol – values that have remained the same to this day.
On the seventh of Business Magazine The government is assessing the end of the extraordinary tax reduction measures on fuel, which include the freeze on the carbon tax, she said, noting that this support, until the end of June, represents an accumulated loss in revenues from the tax on petroleum products (ISP) of more than three billion euros.