Energy Prices Set to Rise Amid Middle East Tensions
Madeira GuideRising tensions in the Middle East are causing disruptions in global energy markets, leading to potential increases in fuel, electricity, and gas prices in Portugal.
The recent escalation of conflict in the Middle East has led to significant disruptions in global energy markets, particularly impacting oil and gas production. The closure of the Strait of Hormuz and the suspension of production in several Middle Eastern countries have resulted in substantial volatility in energy prices.
In response to these developments, DECO PROteste, a consumer protection organization, has issued a warning about the potential for rising energy costs in Portugal. The organization is calling for structural and predictable measures to safeguard consumers. Among the proposed actions are a review of fuel taxation and a reduction of VAT on bottled and piped gas to 6%.
DECO PROteste advocates for a structural reform in the taxation of road fuels, suggesting the implementation of an automatic mechanism that would decrease the tax on petroleum products (ISP) when raw material prices rise. This mechanism would also increase the ISP when refined product prices fall, aiming to provide greater predictability for consumers and revenue neutrality for the government.
Additionally, the organization recommends revising the ISP calculation method, particularly by removing the component related to biofuels. DECO PROteste argues that consumers are already bearing the cost of decarbonization through the mandatory incorporation of 13% of these materials in marketed fuels.
The proposed reduction in VAT on bottled and piped gas is also seen as a necessary measure to alleviate the financial burden on consumers, especially in light of the current economic pressures.
Sources
Madeira Guide
Author