Will fuels reach 2,50 per litre in the short term? “No wonder”

Ofuel prices will rise again next week and forecasts are not encouraging, because there is still a lot of volatility in the markets. It is therefore not surprising that prices will reach EUR 2.50 per litre in the short term, the President of the Order of Economists – Norte, Carlos Brito, in statements to the Council and the Commission News to Minutes. 

“I am not surprised that, if the situation does not calm down, the price in Portugal of fuels can reach EUR 2.50 per litre in the relatively short term“, said, stressing that “we continue to face enormous volatility“. 

The economist explained that the “price in the pump depends not only on oil, but also on refining costs, the quotation of refined products, the euro/dollar exchange rate and, of course, taxation”.

“ Here we enter the unpredictability generated by the two wars in progress. Apart from the uncertainty that was already behind, there are two recent facts that have contributed to the significant worsening of the oil price: the closure of the East-West pipeline in Saudi Arabia after the drone attack from Iraq. And the bombings that Ukraine has done to refining plants in Russia, this country being one of the largest diesel producers in the world,” he said. 

Carlos Brito is president of the Order of Economists – North© Reproduction LinkedIn

How much will the prices go up? “This is the hardest question. As long as geopolitical instability and disturbances in the oil markets and refining persist, we will hardly have sustained price standardisation. We don't know if it's weeks or months“, Carlos Brito anticipated. 

What's the biggest risk right now?

“ So the biggest risk at the moment may not be just fuel rising any higher. Yeah they remain expensive for too long, contaminating even more seriously the costs of transport, of businesses and, therefore, the prices we all pay“, alerted the president of the Order of Economists – North. 

Carlos Brito explained that “with inflationary pressure from outside, Europe risks falling into a situation that is a nightmare for any economist: stagflation“.

“ That is, a scenario characterized by the simultaneous combination of two factors: economic stagnation (nil growth or recession) and high inflation rates (continuous price rise), which will reflect the contraction of investment and rising unemployment. In this context, it is not worth arguing that ‘there are still slacks’ that can be used, because we do not know how long all this will last’, the economist concludes. 

Next week a new increase in fuel prices. Gas oil is expected to increase by 6.5 cent and petrol is expected to be 5 cent more expensive News to Minutes. 

The Minister of Finance admitted that fuel support will remain “some time”, referring an assessment to the development of the war in the Middle East, defending income support rather than energy VAT.