Lisbon, July 17, 2026 (Lusa) - The war in the Middle East has once again put pressure on energy markets and brought fuel pricing back to the forefront of the debate, particularly given the disparity between the speed of price rises and falls.

Portugal does not rely predominantly on oil from the Persian Gulf, but it is exposed to a global market where changes in supply, refining capacity, freight rates, and risk perception can affect prices.

The debate also covers a comparison between the ‘efficient price’ calculated by the Energy Services Regulatory Authority (ERSE), the prices displayed at petrol stations, and the amounts actually paid after discounts, as well as the impact of taxation.

Here are some questions and answers about how fuel prices are set:

+++ Why have fuel prices been rising? +++

The rise in international prices for petrol and diesel is cited as one of the main factors, as these products are purchased by consumers and have their own markets, distinct from crude oil.

For the week of 13 to 19 July, the efficient price calculated by ERSE rose by 1.5% for petrol and 3.8% for diesel, reflecting increases of 4.3% and 9.7%, respectively, in the international prices of these two refined products.

The conflict in the Middle East has also disrupted the Strait of Hormuz, affecting production, refining activity, maritime transport, and product availability, and increasing risk premiums and freight costs.

Diesel is particularly sensitive, as Europe is a net importer of this fuel and relies on external suppliers to balance consumption.

+++ Why doesn’t a fall in the price of Brent immediately reach petrol stations? +++

Petrol and diesel are refined products, with their own price quotations. Brent represents only the price of one of the raw materials used to produce these fuels.

Refining costs and margins, sea freight, storage, logistics, biofuels, retail costs and taxes must all be added to the price of crude oil.

The National Association of Energy, Fuel, Service Station, Car Park and Car Wash Retailers (ANAREC) emphasises that “the petrol and diesel that reach service stations are not crude oil, but refined products with their own international market and a distinct pricing mechanism”.

ERSE confirms that the prices directly relevant to price formation are those of refined products and that these may diverge from Brent due to supply constraints, limitations on refining capacity, changes in seasonal demand, geopolitical tensions and developments in sea freight rates.

+++ Why might prices fall more slowly than they rise? +++

ENSE pointed to high fixed production costs and a shortage of storage capacity in Europe as factors that have slowed the decline in refined product prices relative to the decline in raw material prices.

“Price reductions along the value chain, particularly in the refining sector, are by definition slower than reductions in raw material prices (Crude/Brent), as they reflect two less volatile components: high fixed production costs and a shortage of storage capacity in Europe,” the organisation stated.

Since the start of the Strait of Hormuz crisis, the prices of refined products have risen by as much as 25% for diesel and 35% for petrol, according to ENSE.

The pass-through of price reductions may also not be immediate, as it takes time for price changes to move through the supply chain before reaching petrol stations.

+++ Are fuels being sold above the reference price? +++

In the week of 6 to 12 July, the prices displayed at petrol stations were, on average, above the efficient price, but the amounts actually paid after discounts were below that benchmark.

During this period, average pump prices were 2.7 cents per litre above the efficient price for petrol and 3 cents above for diesel.

Prices after discounts, however, were 1.6 cents below the efficient price for petrol and 3.4 cents below for diesel.

ERSE considers that the discounted price provides a more accurate reflection of the amount actually paid by the majority of consumers. The figures are national averages and include major oil companies, low-cost operators and hypermarkets.

+++ What is the efficient price? +++

The efficient price is a weekly average indicator calculated by ERSE based on international prices for refined products, sea freight, logistics, strategic reserves, biofuels, retail and taxes.

“The efficient price is not a retail price,” emphasises ANAREC, adding that the indicator “serves as a technical benchmark, not as a price that consumers should expect to find displayed or to pay”.

The indicator allows market trends to be monitored and any deviations to be identified; it does not constitute a maximum, mandatory or recommended price for petrol stations.

+++ What is the difference between the pump price and the discounted price? +++

The pump price is the basic commercial offer advertised by the petrol station, before the application of loyalty cards, promotional campaigns, loyalty schemes or other discounts.

The discounted price, published by the Directorate-General for Energy and Geology (DGEG), is calculated from petrol station prices, weighted by quantities sold in the most recent known period, and incorporates fleet cards and other commercial benefits.

For this reason, the discounted price aims to reflect the average amount actually paid, whilst the pump price corresponds to the amount advertised before any commercial reductions.

+++ Do these figures rule out the possibility of excessive margins? +++

ERSE’s average figures do not, at this stage, indicate any widespread irregularity in the market, as the discounted prices are below the benchmark.

However, as these are national averages, they do not allow us to conclude that all petrol stations charge similar prices, nor do they rule out differences between operators, regions, or individual outlets.

The Association of Portuguese Fuel and Lubricant Companies (EPCOL) rejected the notion of a generalised increase in margins, but noted that it can only comment on the market's average behaviour.

“If you ask me whether I would vouch for every single person selling fuel in Portugal, I cannot do so; I am always speaking about the market’s behaviour in average terms,” said EPCOL’s secretary-general, António Comprido, recently.

+++ What could bring fuel prices down? +++

A fall could result from a drop in international petrol and diesel prices, lower refining, transport and storage costs, greater commercial competition or a reduction in the tax burden.

International prices, freight costs and refining capacity do not depend on the Portuguese government or on retailers. Discounts and commercial policies, however, are set by individual operators and may lead to differences between petrol stations.

Taxation is the instrument over which the Government has the most direct control. A reduction in the Tax on Petroleum and Energy Products (ISP) or in VAT could lower the final price, although this would entail a reduction in public revenue and is subject to European rules.

For the week of 13 to 19 July, the government reduced ISP rates by around 0.54 euro-cents per litre for petrol and 1.20 euro-cents for diesel, excluding VAT, by increasing the temporary and extraordinary discount.

+++ How much do taxes account for in the price of fuel? +++

According to the latest ERSE report, taxes accounted for 50.5% of the efficient price of regular 95-octane petrol, corresponding to €0.978 per litre.

For regular diesel, the tax component accounted for 44.7% of the efficient price, or €0.847 per litre.

Excluding taxes, the efficient prices were €0.959 per litre for petrol and €1.048 per litre for diesel. Including taxes, these rose to €1.937 and €1.895 respectively.

The tax component includes the ISP (Fuel Tax), the carbon dioxide emissions surcharge and VAT.

+++ Why are fuels generally more expensive in Portugal than in Spain? +++

The difference has stemmed mainly from taxation rather than pre-tax prices.

According to market data, before the war began, the difference between retail prices was 22.7 cents per litre for diesel and 24.8 cents for petrol.

In June, whilst Spain’s extraordinary tax measures were in force, the difference rose to 32 cents per litre for diesel and 45.6 cents for petrol. The difference in the tax component was 37.5 and 48.7 cents per litre, respectively.

These figures relate to the period when the temporary reduction in Spanish VAT was in force and do not reflect the difference after 1 July.

+++ What measure did Spain adopt regarding VAT on fuel? +++

Spain temporarily reduced VAT on fuel from 21% to 10% as part of measures to tackle the energy crisis caused by the war in the Middle East.

The measure was in force for over three months, until 30 June 2026. Once the exceptional scheme ended, VAT returned to the standard rate of 21% on 1 July.

The Spanish government also reduced the tax on hydrocarbons to the minimum levels permitted by European rules during the period the measure was in force.

+++ Do prices reflect international quotations in the same way in Portugal and Spain? +++

No. In Portugal, fuel prices are generally updated weekly, on Mondays, based on the average of the previous week’s international prices.

In Spain, prices are updated daily and based on the previous day’s prices; consequently, fluctuations in international markets are reflected more quickly in petrol station prices, whether rising or falling.

The difference in frequency, however, does not mean that all operators adjust prices automatically or by the same proportion, as the final price also depends on supply costs, taxation, and each company’s commercial policies.

+++ Can retailers influence the general trend in prices? +++

ANAREC maintains that “retailers have no ability to influence fuel prices”, even when the Brent price falls.

Each operator can set the price displayed at its service station, as well as discounts and promotional campaigns, but does not control international prices, sea freight rates, taxation or refining costs.

EPCOL also maintained that recent developments are not the result of the general behaviour of national operators, although it noted that it cannot speak for the individual commercial policies of each operator.

+++ Why did ANAREC criticise the statements made by the Minister for the Environment and Energy? +++

Maria da Graça Carvalho stated that the fact that prices are not falling in line with the drop in oil prices “makes no sense” and said that the government wanted to understand “exactly why this is happening”.

ANAREC considers that the statements ignore the differences between the crude oil and refined products markets and may give rise to unjustified suspicions regarding operators.

According to the association, this type of comment “fuels unfounded mistrust amongst the public, which unfairly penalises retailers”.

EPCOL considered the analyses requested by the government legitimate, but maintained that the explanation for price trends lies primarily in international markets.

Recently, JN reported that the Minister for the Environment and Energy had sent a letter to the chair of ERSE, requesting a study into how fluctuations in oil prices are passed on to fuel prices.

In the same letter, the minister stated that, should “serious distortions” be found in the market, the regulator should consider “submitting a proposal for the exceptional setting of maximum margins on any of the commercial components that make up the retail price”.

+++ What is at stake in the government’s proposed change to the VAT regime? +++

The draft bill presented by the government in June aims to amend the VAT settlement regime applicable to fuels, as part of the fight against tax fraud in the sector.

ANAREC acknowledged that the change could make the market more efficient, fairer between operators and simpler to manage, but called for the rules to be clarified during the legislative process.

The association considers it necessary to ensure that legal certainty, equal treatment and uniform application are required, avoiding differing interpretations and practical difficulties.

+++ What is the Strait of Hormuz, and why is it important? +++

The Strait of Hormuz is a maritime passage between the Persian Gulf and the Gulf of Oman and constitutes one of the world’s main routes for the transport of oil, refined products and liquefied natural gas.

It is used by countries such as Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, Qatar, Bahrain and Iran to export energy to international markets.

Under normal conditions, around 15 million barrels of crude oil and five million barrels of refined products pass through the strait each day, according to market data.

Any disruption could reduce energy availability, increase insurance and freight costs, and prompt markets to anticipate a shortage, putting pressure on prices even before a complete interruption of supplies.

+++ What is the impact of the Strait of Hormuz on European imports? +++

Europe’s direct exposure to crude oil passing through the Strait of Hormuz is relatively low, but the continent is more exposed to refined products and to indirect effects on the global market.

Around 9% of Europe’s seaborne imports of gas oil and diesel originated in the Persian Gulf in 2025. Europe may also be affected when countries that usually supply it face difficulties in obtaining crude oil for their refineries.

Before the conflict, European diesel stocks were already at their lowest levels in the last five years, making the market more sensitive to supply disruptions.

+++ Does Portugal depend on oil from the Middle East? +++

Portugal does not depend directly on the Middle East for the majority of its crude oil imports.

According to 2025 DGEG data, Brazil supplied 42.3% of Portugal’s crude oil imports, followed by Algeria with 19.6%, Nigeria with 10.6%, Azerbaijan with 10%, and the United States with 7.6%. Together, these five countries accounted for 90.2% of imports.

Portugal may, however, be affected even without importing directly from the region. As oil and refined products are traded on global markets, a disruption in the Strait of Hormuz could reduce the available supply and drive up the prices paid by Portuguese buyers as well.

SCR/ADB // ADB.

Lusa