Government negotiates with Brussels to find a solution to end fuel tax discount
The Executive confirms that it has received a letter from the European Commission urging an end to the ISP reduction and says it is in contact with Brussels to find a solution.
The government is in contact with the European Commission to find a solution to end the discount applied to the Tax on Petroleum Products (ISP), a government source told ECO, confirming that the Executive received a letter from Brussels in June asking for the elimination of this support.
The EU executive sent a letter to the government asking for “concrete action” to be taken to eliminate the discount applied to the ISP — created in 2022 to respond to the escalation of energy prices following Russia’s invasion of Ukraine — warning that maintaining this support “is not in line with the recommendations of the European Council”. The end of this discount will result in an increase in fuel prices.
According to Jornal de Negócios, in a letter addressed to the Deputy Secretary of State and Budget, Brandão de Brito, and the Ministry of Finance, Brussels stresses that the reduction in ISP on diesel and petrol “acts as a subsidy for fossil fuels” and proposes that the European Council recommend that Portugal take measures to “reduce overall dependence on fossil fuels in the transport sector, in particular through the phasing out of fossil fuel subsidies”.
