Government decided to let families “solve where to spend” the 800 million

O minister of Economics, Manuel Castro Almeida, said this Friday that the government decided to let families resolve where they will spend eur 800 million of the support announced yesterdayinstead of applying this amount in reducing fuel prices. 

“ Yesterday the Council of Ministers agreed to allocate EUR 800 million to familiess, pensioners and families. This EUR 800 million, the government could have decided to allocate to those who consume fuels. And if we used this 800 million euros, we could lower the cost of fuel by 24 cents, but the option we're making is to let families figure out where they're going to spend that 800 million euros, it's the families that decide whether to spend it on fuel or on food. Some people don't have a car, the poorest don't have a car, and so the government's option was to let the poorest families do whatever they want from this 800 million euros. They can also use it to precisely put a few more litres of gasoline,” said the Minister of Economics in statements to journalists transmitted by SIC News.

The governor assured that the “State does not win with the war”, stating that “they are absolutely clear matters: what the State earns in VAT [with fuels] returns in the ISP in 23 cents per litre”.

These statements appear on the same day as they were announced fuel price forecasts for next week and that point to another strong increase in diesel and gasoline values. 

Sarmento does the math: With new support, surplus will be “near 0”

The government estimates that the public accounts will end this year with a budget surplus “near 0”, calculating the return to the Portuguese by EUR 800 million through the extraordinary supplement to the pensioners and the reduction of the IRS.

“ With the accounts we have today, with the figures we have today, assuming that there is no cataclysm [...], we will have a small budget surplus, close to zero”, said Finance Minister Joaquim Miranda Sarmento.

In statements to the Lusa agency at the entry for the informal meeting of the euro area finance ministers, in Dublin by the rotating presidency of the Council of the European Union, the person responsible referred to the measures adopted by the Council of Ministers on Thursday, ensuring that “this does not call into question, with today’s information, balanced public accounts at the end of the year and a reduction in public debt”.

Justifying the decision with the evolution of economic and budgetary data available in September, Joaquim Miranda Sarmento pointed out that there is “budget margin to be able to return EUR 800 million to the Portuguese – 400 million through pensioners, 400 million through the IRS, from whom he works”.

The measure for pensioners should cover around two million people, while the reduction of the IRS should benefit approximately 2.5 million households, according to the government, which recalled similar measures adopted in 2024 and 2025.

“ We said that we would wait until September to take these two decisions,” he said, admitting that this year the budgetary situation was initially “more demanding”, namely due to the full implementation of the loans associated with the Recovery and Resilience Plan (PRR), worth about EUR 2 billion.

According to Joaquim Miranda Sarmento, the “good budgetary results of 2025” contributed to the decision, despite new uncertainty factors, such as the storms that affected the country early in the year and the current war in Iran caused by Israel and the United States.

“ This is very, very significant support”, he concluded.

On Thursday, the Council of Ministers adopted a bill to lower the IRS rates from 1st to 6th step, which will fall between 0.3 and 0.5 points.

Also on Thursday, the Government approved, in the Council of Ministers, the extraordinary supplement that will be awarded to pensioners who receive up to EUR 1,611,39, in support ranging from EUR 100 to 200 and will be paid in December.

In addition, fuel support was extended, such as the tax discount On Oil Products (ISP).

In view of all the support now announced, the government’s intervention “returns EUR 2,300 million to taxpayers,” Prime Minister Luís Montenegro said on Thursday.