Parliament Votes Unanimously to Keep Portugal's Fuel-Tax Discount Until 31 December, Worth 9.65 Cents a Litre on Diesel From Monday

Parliament voted unanimously on Friday 9 October to keep Portugal's temporary discount on fuel tax running until 31 December 2026. The same evening, a ministerial order in the official gazette set the discount for the week starting Monday 12 October at 9.65 cents a litre on road diesel and 7.80 cents on unleaded petrol, before VAT.

The government's bill was approved in a single sitting, in the general, detailed and final overall votes, with no party against, Observador and Jornal de Negócios reported, citing the Lusa news agency. It will apply from 30 June to 31 December 2026.

Why a law was needed

The discount works on the Imposto sobre os Produtos Petrolíferos e Energéticos (tax on petroleum and energy products), known as the ISP. Each week the Environment and Energy Minister and the Secretary of State for Tax Affairs reset the ISP rate on the mainland by portaria (ministerial order) under article 92 of the excise duties code.

To let the rate go low enough, parliament passed Lei n.º 12-B/2026 in April. It temporarily lowered the legal minimum ISP rates to 199.89 euros per 1,000 litres of unleaded petrol and 156.66 euros per 1,000 litres of diesel (about 20.0 and 15.7 cents a litre), but only until 30 June 2026. According to Lusa, the discount has been delivered by changing those minimum limits.

The Council of Ministers (cabinet) approved a bill on 17 September to carry that regime to the end of the year. Its communiqué said the aim was to keep the mechanism going and to make sure "the State does not benefit" from higher fuel prices. Because the new law takes effect from 30 June, it covers the months since the April law ran out, during which the weekly orders kept coming.

How the discount is set

The rule is restated in every weekly order. When the pump price of unleaded petrol or road diesel is more than 10 cents above its level in the reference week of 2 to 6 March, the government cuts the ISP by the extra VAT that the higher price brings in. The gazette describes this as "the return of the additional VAT tax revenue". The discount is built into the price at the pump; there is nothing to claim.

Both conditions are met for the coming week, according to Portaria n.º 451-A/2026/1, published in a supplement to the Diário da República (official gazette) on 9 October and in force from Monday 12 October.

What changes on Monday

• Diesel: the discount is 96.47 euros per 1,000 litres, or 9.65 cents a litre, against 97.20 euros (9.72 cents) this week under Portaria n.º 448-A/2026/1. The ISP rate goes from 264.40 to 265.13 euros per 1,000 litres, a rise of less than a tenth of a cent a litre.
• Unleaded petrol: the discount widens from 69.37 to 78.04 euros per 1,000 litres, or from 6.94 to 7.80 cents a litre. The ISP rate falls from 428.15 to 419.48 euros per 1,000 litres, a cut of 0.87 cents a litre before VAT.

The order explains the shift: the government expects the price of diesel to fall next week and the price of petrol to rise. The wider petrol discount cushions that expected rise; it does not by itself mean petrol gets cheaper. The order sets a tax rate, not a pump price.

Measured against the standard rates fixed in Portaria n.º 427-A/2025/1 (361.60 euros per 1,000 litres of diesel and 497.52 for petrol), the discount takes about 27 percent off the diesel rate and about 16 percent off the petrol rate. Both rates include a road service contribution of 111 euros per 1,000 litres on diesel and 87 euros on petrol.

What it is worth at the pump

VAT at 23 percent is charged on top of the ISP, so the saving at the till is a little larger than the tax cut itself: about 11.9 cents a litre on diesel and about 9.6 cents on petrol. On a 50-litre tank, that is roughly 5.90 euros on diesel and 4.80 euros on petrol, compared with the full rate.

The orders apply to mainland Portugal only; drivers in the Azores and Madeira are not covered by them.

Opposition proposals rejected

Parliament voted down two broader proposals, according to Lusa. Chega wanted to scrap the ISP surcharge and cut VAT on fuel from 23 percent to 13 percent. Iniciativa Liberal (Liberal Initiative) proposed removing the minimum ISP rates until December 2027.

What happens next

• The President: the approved text goes to President António José Seguro to be promulgated, then to the Diário da República. The April law took a week from vote to publication: approved on 8 April, promulgated on 10 April, published on 15 April.
• Each week: so far a new order has appeared every Friday, taking effect the following Monday. The discount applies only while prices stay more than 10 cents above the March reference.
• After 31 December: nothing has been decided. Neither the cabinet communiqué nor the reports of Friday's vote say what happens to the discount in 2027, and Iniciativa Liberal's proposal to remove the minimum rates until December 2027 was rejected.

The discount is reset every week: compare the 9.76 cents on diesel set in mid-September with the trims of early October, and see the figures showing drivers bought less diesel in August as prices climbed.