Should I attest to that now? Depends on whether it's diesel or gasoline (see forecasts)

Ofuel prices will show different behaviour at the beginning of next week. The price of gas oil should rise four cents, while petrol should lower six cents, according to the forecasts released on Friday by Automobile Club de Portugal (ACP). 

“ If the forecasts for next week are confirmed, the average price of diesel will rise to EUR 2,15 per litre, while gasoline will fall to EUR 2,04 per litre,” notes the ACP.

The ACP explains that the “fuel prices continue to be impacted by the war in the Middle East, with the US, Israel and Iran involved in military attacks in the region”, and the “war led to the blockade of the Ormuz Strait, where 20% of the oil and natural gas trade passes, leading to the price of fuel to be seriously changed.”.

It should be noted that the final average may still change depending on the evolution of international oil prices and the final cost of the pump may vary according to the supply station, the brand and the location. The update of the Petroleum Tax (ISP) discount may also change the expected values.

Setting fuel prices is “last case”

The Minister for Environment and Energy argued on Wednesday that the fixing of fuel prices should only be used in the last case, arguing that the market should work and the State should act through taxes and subsidies.

“To set prices is a measure that is only done in the last case, because the State pays, we must let the market work,” said Maria da Graça Carvalho, at a hearing in the Committee on Environment and Energy.

The governor said she was not in favour of direct price intervention and advocated tax measures and support for consumers and more vulnerable sectors.

“I am not an apologist of moving in the market, one should let the market work and then act on taxes and support for the most vulnerable,” he said.

Maria da Graça Carvalho evoked previous experiences to justify this position, referring to a decision limiting fuel prices during a government led by António Guterres.

According to the minister, former minister Joaquim Pina Moura later acknowledged that this intervention had been a bad decision.

“There is evidence, just yesterday I read some statements from former Minister Pina Moura, in the time of the Engineer Guterres, in which they limited fuel prices and he himself says it was the worst measure he took during his life, because interfering in the market always has bad consequences,” he said.

The minister also pointed out the Iberian gas price limitation mechanism adopted during the energy crisis, as an example of the risks of interference in the functioning of the market.

“ The interference in the Iberian gas brake market [...] had very serious consequences, particularly for Spain, but also for Portugal”, he said.

Maria da Graça Carvalho added that, in her assessment, the investment in wind energy fell after the application of that mechanism.

The governor also reiterated that the executive’s strategy to respond to the rise in fuel is to ease the tax burden and concentrate support on the most vulnerable sectors, rather than administratively setting prices.

The rise in fuel prices occurs in a context of increased tensions in the Middle East, to which the Minister added the effects of the war between Russia and Ukraine on refining capacity and energy supply.

The minister warned that the destruction or reduction of the capacity of various refineries, as has happened, may cause market standardisation to take time even after the end of the conflict, as these infrastructures take years to rebuild.