Carneiro accuses Government of tax-driven fuel price rise, demands temporary VAT cut after diesel hits nearly €2/litre

Price hike defies falling oil

Portuguese drivers faced another fuel price rise on Monday despite a sharp drop in international crude. Diesel climbed 8.5 cents per litre and petrol added 2.5 cents, even as Brent crude fell more than 5% to $87 a barrel. The government attempted to soften the blow by reinforcing the extraordinary ISP discount, adding roughly 1.5 cents per litre of diesel and nearly 1 cent per litre of petrol. However, both fuels now average close to €2 per litre at the pump.

Carneiro links jump to government taxes

PS leader José Luís Carneiro filled his official car with €50 of fuel at a Paredes station and immediately linked the increase to fiscal decisions. He argued the Executive has been quietly raising fuel taxes via finance ministry ordinances, without a parliamentary vote, and that this has generated over €1,048 million in additional state revenue since 2024. “The Government is making money from the increase in fuel taxes at the expense of the sacrifice of families and businesses,” he told journalists. Carneiro calculated that Portuguese consumers are now paying about 9 cents more per litre of diesel and over 6 cents more per litre of petrol purely because of tax policy.

Demands for a temporary VAT cut

The PS has tabled a proposal to cut VAT temporarily from 23% to 13% on fuels, electricity and a basket of essential foods, a measure Carneiro says would cushion the impact of higher crude prices. The motion was rejected by the governing PSD, Chega and Iniciativa Liberal. Carneiro insisted Prime Minister Luís Montenegro owes voters an explanation: “The prime minister has a duty to answer the Portuguese why he did not accept those measures and why he insists on continuing to punish the Portuguese with fuel taxes.” He declined to set a timetable, saying he wanted to wait for the government’s draft budget, due in October, and would not “burn stages” by previewing possible negotiations.

Hauliers warn of squeezed margins

During the Paredes visit Carneiro met Joaquim Barbosa, an international transport operator who said fuel now accounts for about 45% of his company’s operating costs. Barbosa explained that clients refuse to absorb higher haulage tariffs: “We cannot go to the client and say we will increase transport by 10 or 15%. The client does not accept because they already sold the product.” The exchange underscored the pressure on road freight firms that employ dozens of drivers and run large fleets.

Spanish prices remain lower

Spain offers a sharp contrast. At the start of the Ukraine war Madrid cut VAT on fuels from 21% to 10% for three months, a measure that ended in early July. It still maintains a hydrocarbon fiscal discount: 15 cents per litre this month, 10 cents in August and 5 cents in September, together with exemptions for agricultural diesel and lorries. As a result, average pump prices across the border are €1.67 per litre of diesel and €1.62 per litre of petrol.

Political backdrop

Carneiro refused to comment on the controversy surrounding Minister of Internal Administration Luís Neves, telling reporters repeatedly that he wanted to keep the focus on fuel prices. He also deflected a question about whether the fuel debate could bleed into budget talks, saying only that the government’s proposal would not arrive until October. By concentrating his message squarely on the cost of living, Carneiro framed the tax burden on fuels as the centrepiece of his party’s pre-budget offensive.