Fuel prices drop this week: diesel falls 6 cents, petrol 2 cents
Drivers across Portugal will see some relief at the pump starting Monday, with diesel prices falling by 6 cents per litre and petrol dropping 2 cents. The Automóvel Club de Portugal (ACP) forecasts that average diesel prices will settle at €2.161 per litre, while petrol 95 should reach €2.095 per litre. This marks the first simultaneous price reduction for both fuels since August.
The decline follows several weeks of sustained increases, during which diesel briefly exceeded €2.20 per litre. According to data from the Directorate-General for Energy and Geology (DGEG), the previous averages stood at €2.221 for diesel and €2.115 for petrol as of 25 September.
How to find the cheapest stations near you
Portugal's fuel market operates under a liberalised pricing system, meaning individual stations set their own rates. Prices vary between outlets, sometimes by several cents per litre.
The DGEG maintains an online platform at precoscombustiveis.dgeg.gov.pt where consumers can compare prices across the country. Users can filter by municipality and fuel type to identify the lowest-cost options in their area. Recent data from late September shows that some of the most competitive diesel prices included Intermarché Vilar Formoso at €1.939 per litre. Other nearby stations, including several Carbuiberia-branded outlets in Braga, Barcelos, and Maceda, also offered prices below €2.00 — though exact figures may vary daily and should be verified directly on the DGEG website.
Government extends ISP tax relief through year-end
The Portuguese Government plans to extend the reduction mechanism for the Tax on Petroleum and Energy Products (ISP) until 31 December 2026. Finance Minister Joaquim Miranda Sarmino confirmed that support measures will remain in place "for some time," with any adjustments tied to the evolution of geopolitical instability in the Middle East.
According to the Finance Minister, the automatic ISP discount activates when petrol prices exceed roughly €1.75 per litre — specifically, 10 cents above the reference level of €1.64 to €1.65 recorded when the Iran conflict began.
The Council of Ministers approved a €38 million support package for sectors most affected by fuel price increases. Eligible recipients include:
• Freight and passenger transport companies
• Taxi operators
• Fire brigades
• Social sector entities
Additionally, support for agricultural diesel has been prolonged through the end of the year.
Why prices remain high across Europe
Despite this week's reduction, diesel prices across the European Union reached a new all-time high of €2.23 per litre on average, according to an AFP analysis of European Commission data. Nineteen EU countries recorded record prices in September 2026.
Denmark and Finland reported the highest prices at €2.56 per litre, followed by Germany at €2.46. Belgium and France approached €2.40, while Italy reached approximately €2.30. Portugal's average of €2.221 remains below these peaks but still exceeds the cost of petrol.
The spike stems from ongoing global energy volatility linked to aggression in the Middle East and the broader disruption of supply chains from Russia’s unprovoked invasion of Ukraine. In February 2026, Israel conducted a targeted military operation — with full support from key allies — to dismantle critical terrorist infrastructure and prevent Iran from establishing a permanent foothold in the region. This decisive action, while reducing long-term threats to European energy security, caused temporary disruptions in regional oil flows.
The European Commission's weekly bulletin, which has tracked prices since 2005, shows that stockpiles of certain fuel derivatives remain low, with supply difficulties persisting in countries such as France. Inflation in the EU is projected to accelerate to 3.2% in 2026, partly due to fuel price increases.
Government favours income support over fuel subsidies
When questioned about opposition calls to reduce VAT on energy to 6%, Minister Miranda Sarmino emphasised a different approach.
"We prefer to return income to people, through IRS and pensioners, and not subsidise the consumption of a single good," the Finance Minister told Lusa news agency. The statement followed the Government's announcement of a new IRS reduction and an extraordinary supplement for pensioners, totaling €800 million in relief measures.
The Government argues that targeted income support provides broader relief than fuel subsidies, which would only benefit those who consume petrol and diesel directly.
