State loses €26 million on fuel tax in two months

By INÊS LOPES – [email protected]

Consumers are thinking twice before using their cars as the price of fuel again hit record highs last week.

In January, consumption of 95 octane petrol was down 7.7% while for diesel it was down 6% in comparison to the same month last year, revealed Portugal’s General-Directorate for Energy and Geology (Direcção-Geral de Energia e Geologia).

At the end of last week, the price of 95 octane petrol reached a record high of €1.78/l while diesel cost €1.53/l.

Fuel prices were however expected to fall by two cents this week, said the energy authority.

Less fuel consumption is translating into less money for the State’s coffers as revenue from fuel tax Imposto Sobre Produtos Petrolíferos (ISP) slumped by €26 million during January and February.

During the same period last year, the State had earned around €389 million on ISP, while this year, the tax amounted to €363 million.

According to a study by the National Statistics Institute (Instituto Nacional de Estatísticas), in 2010 families were spending more on fuel than on energy for the home – per month an average of €83.5 was going towards fuel while the electricity bill was around €70.

In a bid to find cheaper fuel, many drivers are crossing the border and filling up in Spain, where a 50 litre tank of petrol costs around €13 less than in Portugal.

The president of the national association of fuel re-sellers ANAREC, Virgílio Constantino, fears the cost of fuel in Portugal could force 300 petrol stations to close down this year, leading to 2,000 jobs being lost. In 2011, 250 petrol stations shut down in Portugal.