Diesel Jumps 7 Cents a Litre on Monday as Middle-East Tensions Lift Portugal's Pump Prices

Drivers in Portugal should brace for a more expensive fill-up next week. From Monday, 14 July, diesel is expected to rise by about 7 cents a litre and petrol by roughly 2.5 cents, according to market projections — one of the sharper single-week jumps of the summer.

If the forecasts hold, the average price of a litre of diesel (gasóleo) would climb to around €1.863, while a litre of petrol (gasolina) would reach about €1.918. For a typical 50-litre tank, that is an extra €3.50 or so for a diesel car in a single week — the kind of increase that lands squarely on commuters and anyone driving into the interior for the summer.

Blame the Middle East, again

The cause is not domestic. Fuel prices in Portugal track the international market for refined products, which in turn follows the price of crude oil, and both have been shoved higher by a fresh escalation of tension in the Middle East. After the United States ended its ceasefire arrangement with Iran and carried out strikes against the country during the week, oil markets reacted the way they usually do to the threat of disruption in the Gulf — by pricing in risk.

Brent crude, the benchmark Portugal's fuel contracts are indexed to, was running about 5% higher over the week. It touched $80 a barrel on Wednesday before easing back to roughly $76, but even the partial retreat leaves it well above the levels that had kept pump prices relatively calm through late June.

There is a cushion, however. The government is expected to widen the discount it applies to the ISP (Imposto sobre os Produtos Petrolíferos, the tax on petroleum products) on both diesel and petrol, with the adjustment due to be announced by the end of the day. That mechanism — effectively handing back a slice of fuel tax when prices spike — has become the government's standard tool for softening the blow at the pump, and it should absorb part of the increase before it reaches drivers.

The projections come with the usual caveat. The Automóvel Club de Portugal (ACP), whose estimates these are, stresses that they are based on commodity prices as of Thursday's close and could still shift depending on how crude and refined-product markets move through the end of the week. A calmer Friday could trim the rise; further bad news from the Gulf could deepen it.

Either way, the direction of travel is clear. After several weeks in which falling or flat prices gave motorists a modest break, the combination of geopolitical risk and a firmer oil price is pushing costs back up — and the size of the government's tax discount will decide how much of that pain actually shows up on the forecourt display on Monday morning.