The government will keep the Petroleum Products Tax (ISP) rates on gasoline and diesel unchanged, which are expected to fall by 5 and 7 cents, respectively, next week. But the announced measure of a cut equivalent to 13% VAT would mean even bigger cuts.
An ISP reduction equal to the final value-added tax price of 13%, which has not yet been published, should give an additional discount of 16 and 20 cents on gasoline and diesel, respectively. Autovoucher has already paid 91.4 million euros, of which 1.1 million this month.
As long as the European Commission does not authorize Portugal to reduce VAT on fuel, the government will reduce the ISP so that the final price per liter of fuel is equivalent to VAT at 13%.
The head of the PSD said on Friday that this measure only reduces some of the additional revenue that the government had, as budget calculations are made at 2020 prices. Roy Rio explained that when preparing the state budget for 2021, the price of crude oil was. It was around $51, after rising to 79 in October and is currently standing around $100.
On October 1, 2020, the value-added tax on gasoline (€1.382 per liter) was 0.258 cents, compared to €0.372 earlier this week. In the case of diesel, the VAT is 0.224 cents (1.198 euros / liter) and now weighs 0.36 euros.
Of this difference alone, in March the government raised an additional 77 million euros. But the measure announced two days ago (13% reduction in VAT) could mean more than that, as it has an impact of 0.16 cents on gasoline (plus 5 cents) and 0.20 cents on diesel (+7 cents).
Consumption over 2019
Fuel consumption continues to rise and exceed the values of years prior to the epidemic. In March, diesel consumption increased by 26.8% compared to 2021 and 10.6% higher than 2019. And in gasoline, the increase was even greater: 46.5% compared to 2021 and 11% compared to 2019.
And diesel, the most consumed fuel, increased by 66% between March 2021 and the same period this year, while gasoline increased by only 39.54% in the same period. VAT on these fuels generated an additional €76.9 million in March.
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