Portugal's ERSE finds no fuel market irregularities and no persistent rocket-and-feather price effect

Study scope and request

Portugal's Entidade Reguladora dos Serviços Energéticos (ERSE) published on Thursday, August 13, 2026 the results of an in-depth study on road fuel price evolution in mainland Portugal. The study was requested by Minister of Environment and Energy Maria da Graça Carvalho on July 15, 2026, and covers the period from January 1, 2023 to July 27, 2026. In a July letter to ERSE president Pedro Verdelho, the minister had admitted the possibility of the government exceptionally fixing fuel prices at pump stations if serious market distortions were found.

No persistent rocket-and-feather effect

The study examined the widespread consumer perception that prices "rise like a rocket and fall like a feather." ERSE concluded that this perception does not, in general terms, find explanation in how prices form in the national market. For gasoline, specifically gasoline 95 simple, no statistical evidence of asymmetry was identified at any of the horizons analysed. For diesel, a small asymmetry of reduced economic magnitude was observed, limited to the first weeks of the price adjustment process.

Specifically, for diesel simple, when the international quote varies by 10 cents per litre, the estimated difference in passing on a rise versus a fall of equal magnitude is 0.76 cents per litre in the first week. This asymmetry remains statistically significant for the first three weeks, progressively diminishing to 0.39 cents per litre after four weeks, from which point it is no longer statistically demonstrable.

Market functioning criteria

ERSE evaluates market functioning using four comprehensive criteria: wholesale market concentration, retail market concentration, diversity of commercial offers, and the response of consumer prices to international quote evolution. Three criteria were met: retail concentration, diversity of offers, and the strong relationship between national prices and international quotes. The only criterion not met was wholesale concentration, where ERSE found high concentration. However, since the four criteria were not jointly violated, the market was not considered to have functioned irregularly.

Price drivers and comparison with Spain

ERSE stressed that pump prices reference international quotes for already-refined gasoline and diesel, not directly the price of crude oil (Brent). The study concluded that fuel price evolution in Portugal was explained above all by the evolution of those refined-product quotes. In the first seven months of 2026, marked by the onset of war in the Middle East, national prices evolved broadly in line with international purchase costs for gasoline and diesel, though temporary differences were observed in the speed with which quote variations were passed through to pump prices. ERSE also noted that the difference between Portugal and Spain lies in taxation, and the regulator does not recommend fixing maximum margins on consumer fuel prices.

The results do not support, therefore, that price decreases are passed on in a persistently slower or less complete manner than price increases.