Portugal fuel prices expected to drop significantly next week

New week, new prices. From 10 August, industry forecasts point to a sharp drop in fuel prices, of around 12 cents on diesel and 12.5 cents on petrol, according to the Automobile Club of Portugal (ACP)

If the forecasts for next week are confirmed, the average price of diesel will fall to €1.931 per litre, while petrol will retreat to €1.855 per litre.

These figures may still change, the ACP said, since "this forecast consists of average values based on crude prices at last Thursday's market close," adding that "if there are fluctuations in crude and fuel prices up to the end of this Friday, there may be some variation in prices compared with what is currently forecast".

On Friday, regular diesel cost €2.051 per litre, while 95-octane unleaded petrol stood at €1.980 per litre, according to average prices published by Portugal's Directorate-General for Energy and Geology (DGEG, source in Portuguese).

According to the same source, these daily average prices "are calculated on the basis of the prices reported by filling stations, weighted by the quantities sold in the latest period for which figures are available, incorporating discounts applied at forecourts such as fleet cards and others".

Prices charged to end consumers may vary from station to station, since the sector, and consequently its pricing policy, is liberalised.

Fuel prices continue to be heavily affected by the war in the Middle East, with the US, Israel and Iran involved in military attacks in the region.

The war has led to a blockade of the Strait of Hormuz, through which 20% of the world's oil and natural gas passes, causing major swings in fuel prices.

Since the outbreak of the war in the Middle East, the government has undertaken to apply a new extraordinary and temporary cut in the ISP fuel tax whenever fuel prices rise by more than 10 cents, in order to mitigate the surge in prices.

The government is therefore expected to adjust the ISP discount, as has been happening in recent weeks, which may lead to changes in the estimated prices from next Monday.