Portugal urges cautious hydro energy use as fuel prices reach record highs

Fuel price increases and consumption trends

Fuel prices across Portugal reached record levels on 21 September 2026, with diesel increasing by an average of 6.5 cents per litre and gasoline rising by 5.0 cents per litre. Environment and Energy Minister Maria da Graça Carvalho spoke to journalists in Lisbon to clarify national fuel demand trends after earlier morning statements in which she expressed surprise at elevated consumption volumes and urged the public to save fuel. The minister explained that while recorded fuel demand climbed continuously through July, newer studies indicate that consumption contracted slightly during August and the beginning of September. Official government statistics for those two months remain pending publication. Carvalho described the late-summer drop as an expected consumer reaction to rising fuel expenses, observing that previous economic crises produced similar declines as households adjusted their budgets.

Some other studies show that, in August and the beginning of September, there was a slight decrease.

Hydroelectric reserves and natural gas exposure

During a separate appearance in Soure, in the Coimbra district, Carvalho appealed for cautious management of renewable hydroelectric resources as Portugal navigates an energy crisis. Hydroelectric power generation serves as a critical shield against expensive natural gas imports, providing necessary frequency and supply stability to the national power grid. If reservoir water levels decrease, electricity producers will be required to burn higher volumes of natural gas to meet domestic demand. Because natural gas prices remain elevated on wholesale markets, increased gas consumption would translate directly into higher generation costs. Carvalho stressed that state energy planners are managing hydro assets with discipline to prevent unnecessary depletion of water reserves.

We have been protected in relation to the rise in gas prices because we have a lot of renewable energy. And we have a precious renewable, which is hydro, that gives us stability in the system. Now, if we have less water, we will have to exercise some caution and care regarding the use of hydro, which will force us to use more gas, which is very expensive.

River basin monitoring and climate challenges

Government agencies have instituted continuous tracking across Portuguese river systems to evaluate hydrological changes and protect multi-sector water supplies. Carvalho pointed out that recent environmental observations detected water warming in several basins, an irregular development indicating broader climate-related disturbances. Speaking at the Solemn Session of Municipality Day in Soure, where she received the Municipal Gold Medal, the minister emphasized that water resources must satisfy essential requirements for human consumption, livestock, agriculture, and general economic activities in addition to electricity output. Technicians are carrying out round-the-clock monitoring across every river basin to maintain an ongoing balance between resource preservation and power demands.

We are monitoring all effects and all river basins day by day, hour by hour. We are making cautious use of renewable hydro energy precisely to keep maintaining balances.