The tax on petroleum products drops today and cuts the price of gasoline by 2 cents and diesel by 1 cent – current events

On Friday afternoon, the Minister of State for Finance announced that the government would transfer 63 million euros of value-added tax collected to the public in connection with the increase in the average selling price of fuel in reducing ISP rates.

“Today the government took a decision to reintroduce a model to return the tax revenue it gets from the price of fuel. In view of the increase in the average selling price of fuel to the public, the state collects an amount of more than 60 million euros in value-added tax, and therefore, this increase in ISP rates will be reflected in the decrease”, a government official stated, adding that the measure will translate into “ A two-cent drop in the ISP for gasoline and one cent down on the ISP for diesel.

In general, the amount to be returned by the government is up to 90 million euros, as 63 million euros for VAT add 27 million euros to approximate the ISP’s exemption.

“This 63 million euros is, in fact, 90 million euros a year, as the repercussions of the additional revenue we will make from the fuel, will make the unit fee for the ISP [Imposto sobre Produtos Petrolíferos] Antonio Mendonca Mendes explained to reporters, at a press conference at the Ministry of Finance in Lisbon, at a press conference at the Ministry of Finance in Lisbon:

The government official also explained that the government will monitor the development of average sales prices to the public and – if necessary – “conduct the upward revision”, “in order to return the full amount of the value-added tax received”.

In 2016, the government already used a similar mechanism when fuel prices were low, driving up the ISP to compensate for the drop in value-added tax.

“Now we use the same mechanism, but to do it the other way around, where we get more VAT revenue than we expected. Antonio Mendes stressed that we will return this VAT revenue in full to consumers, temporarily reducing the ISP unit rate for gasoline and diesel, in the respective ratios, Operators can now reverse this drop in the selling price to the public.

The government also indicated that the indications it has indicate that there will be a decrease in the prices of fuel markets, which is an exceptional situation.

Regardless of the potential price drop in the fuel markets, the measure is effective today and continues until January 31, 2022.

Also on Friday, the Governor of the Bank of Portugal, Mario Centeno, indicated that the increase in prices, especially fuel, should be temporary, despite it being “seemingly out of control”, noting that oil had been trading at negative prices during the crisis. .

Analyzes tell us, at the European level, that the effects are temporary and of a financial nature […]. “I want to remind you that oil has been trading at negative prices during the crisis,” said Mario Centeno, speaking after lunch at the American Chamber of Commerce in Portugal.

However, he explained, we are now seeing a reversal of this scenario “on a large and seemingly just uncontrolled scale”.

The former minister also noted that all scenarios indicate that inflation is temporary, especially in Portugal, with it contained at 0.9% in 2021 as a whole.

Lusa has contacted the Portuguese Association of Oil Companies (Apetro) and the National Association of Fuel Merchants (Anarec), but it has not yet been possible to obtain comment.

According to the proposed state budget for 2022, which was delivered to Parliament on Monday, the additional ISP fee will remain next year, amounting to 0.007 euros per liter for petrol and 0.0035 euros per liter for road diesel, colored and marked diesels.