Finance minister presents “temporary” discount on fuel prices… to be paid through IVAucher programme

Finance minister João Leão has presented the latest government measure designed to help citizens with rising fuel prices.

It involves a temporary discount of 10 cents per litre on either petrol or diesel, to be ‘paid’ through the IVAucher programme – originally set up to help the restaurant, accommodation and culture section through the pandemic.

Initial reports were hazy on how the scheme will work – but Saturday’s papers saw the nuts-and-bolts laid out in plainspeak: citizens need to ‘access’ the IVAucher programme so that starting from November 1, 10 cents for every litre – up to a value of 50 litres per month – will be automatically ‘returned’ via a direct transfer into their bank accounts.

The measure will remain in place until March 2022, said Mr Leão – stressing that the government’s carbon tax will remain frozen until that date.

This is perhaps worth understanding: according to tabloid Correio da Manhã, once the carbon tax is ‘unfrozen’, the government’s plans are to increase it by 5%. In other words, fuel costs for everyday folk will increase again no matter where they are by that date.

The carbon tax increase was initially envisaged to kick in from January 1, 2022. Now the date is April 1, 2022.

Yesterday, finance minister João Leão said “no other country in Europe has decided to take measures in this regard” – which is not entirely correct: France has announced that it will be giving low-income families cheques for €100 to help with fuel costs this winter.

Portugal’s measure represents a fraction of this value: families can only hope to receive a total of €25 ‘back’ from the government for their fuel purchases in the five months from November to March (inclusive). (SEE REACTION FROM ACP (automobile club) BELOW….)

In Mr Leão’s mindset the decision represents an injection of  “around €133 million into the pockets of Portuguese families in the coming months”.

As for the transportation sector, taxis and buses operating in Portugal are to receive one-off cheques for €190 and €1,050 respectively, while goods vehicles will receive further discounts on IUC (road fund tax) dues and a slightly higher ratio of what is called the ‘professional diesel threshold’.

Government’s scheme is “a poisoned sweetener”

Carlos Barbosa, president of ACP (Portugal’s automobile club), has given the government’s discount the thumbs down, telling Rádio Renasença that it is “a poisoned sweetener”.

“The big problem that remains when it comes to fuel is the taxes”, he stressed. “By not adjusting the taxes” (something for example that the regional government of Madeira has done) “these 10 cents are of no interest to the Portuguese. They do not reduce the price of taxes in any way. When we get to the end of March 2022 (the situation) will be exactly the same”.

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