fuel

Left Bloc slams government’s decision to increase tax on fuel

Finance ministry announced increase late on Friday

Portugal’s Left Bloc party has wasted no time in slamming the government’s decision – announced late on Friday night – to increase ISP tax (the levy on fuel products).

As RTP explained, “the price of fuel won’t be reducing on Monday because the government has decided to cut the discount in tax that it is applying…”

Left Bloc coordinator Catarina Martins sees the decision as both “inexcusable”, and “incomprehensible”.

“It is absolutely incomprehensible the Government’s decision to raise ISP and with that cancel the decrease that was expected to exist tomorrow (Monday) in fuels” she told journalists today in Póvoa de Varzim. 

“Fuel prices have been absurd; prices that impact the entire economy. The Government’s action in not allowing the lowering of prices is an action that will harm everyone,” she warned.

“Portugal is one of the countries where food prices have increased the most”, Ms Martins added. “We have a government that has not allowed salaries to increase and has not kept up with inflation. It has not controlled prices (…) this is an impossible situation for the country.

“We know that there is an international crisis that the Government did not choose. But the Government chooses its response to this crisis –  and by freezing salaries and not allowing them to keep up with inflation, by not allowing fuel prices to go down through taxation, what it is doing is worsening the crisis, and that is unforgivable.” 

The Ministry of Finance announcement on Friday explained that the ISP discount would be reducing for December by 3.9 cents per litre for diesel and 2.4 cents per litre for gasoline, “taking into account the fall in prices” of fuel itself.

“The mechanism applicable to the ISP equivalent to a decrease in the VAT rate from 23% to 13% and the compensation mechanism via ISP reduction of additional revenue from IVA (VAT), resulting from changes in fuel prices, remain in force”, said the statement, referring to what the ministry describes as ‘continued’ discounts of 17.1 cents per litre on diesel and 15.4 cents per litre on petrol.

RTP explains all this means that the expected fall in fuel prices on Monday will not only ‘not be happening’, but petrol will work out around 1.5 cents per litre more expensive than it has been this week (diesel staying ‘more or less the same’).

The last seven weeks have seen falls in the cost of diesel. Petrol prices had been falling for the last month.

natasha.donn@portugalresident.com