Fuel bills are heading higher again, and the latest Europe news will be unwelcome for drivers already dealing with rising living costs. Motorists in Portugal are set to pay noticeably more at the pump from Monday, with diesel and petrol prices both forecast to increase sharply during the week of 20 to 26 July.
According to projections cited by Portugal’s Automobile Club and based on energy market forecasts, diesel is expected to rise by 13.5 cents per litre, while petrol is set to increase by 6.5 cents per litre. If those estimates hold, average pump prices will reach around €1.988 per litre for diesel and €1.980 per litre for petrol.
Europe News: Why diesel and petrol prices are rising
The latest spike in fuel costs is closely linked to renewed geopolitical tension in the Middle East. Ongoing conflict involving the United States, Israel and Iran has continued to put pressure on global energy markets, driving up crude oil and refined fuel prices.
One of the biggest concerns remains the Strait of Hormuz, a strategic shipping route through which a major share of the world’s oil and natural gas trade passes. Any disruption there tends to ripple quickly across international markets, pushing wholesale energy costs higher and eventually feeding into prices paid by consumers.
Industry bodies have also warned that current estimates are based on raw material prices from late last week, meaning final pump prices could still shift depending on oil market volatility.
How much drivers will pay from Monday
For households and businesses, the increases are far from minor. The expected changes mean:
- Diesel: up 13.5 cents per litre to about €1.988
- Petrol: up 6.5 cents per litre to about €1.980
Diesel users will feel the sharper hit, particularly commercial drivers, logistics operators and commuters who rely on diesel vehicles for long-distance travel. This is also significant for wider inflation because higher transport costs can filter into food distribution, retail delivery and services.
Government response and retailer scrutiny
The Portuguese government has indicated that an extraordinary and temporary reduction in fuel duty could be applied when price increases exceed 10 cents. That threshold appears especially relevant now given the scale of the projected diesel rise.
At the same time, the country’s Environment and Energy Minister, Maria Graça Carvalho, has reportedly asked the energy regulator ERSE to investigate fuel pricing by retailers since 2024. The aim is to examine why reductions in international oil prices are often slower to appear at filling stations than price increases.
That issue has been central to debate in many markets, not just in Portugal, and it continues to resonate in irish news, ireland news and broader Europe news coverage where energy affordability remains a major public concern.
What happens next?
Finance Minister Miranda Sarmento has made clear that cutting VAT on fuel is not currently on the table, despite renewed calls for broader tax relief. That means drivers are likely to see most of the market pressure passed through directly unless other temporary support measures are introduced.
Key takeaway for consumers
Motorists should prepare for higher forecourt prices from Monday, especially for diesel. This Europe news story highlights how quickly global conflict can hit local household budgets. For readers following Europe news, ireland news and irish news, the main takeaway is clear: fuel volatility remains a live issue, and further movement will depend on both Middle East tensions and government action in the days ahead.
FAQs
Why are fuel prices increasing in Portugal?
Prices are rising mainly because of higher oil and fuel costs linked to tensions in the Middle East and disruption risks affecting global supply routes.
How much will diesel and petrol cost?
Forecasts suggest diesel will average about €1.988 per litre and petrol about €1.980 per litre during the week of 20 to 26 July.
Will the government reduce fuel taxes?
The government has said a temporary reduction in petroleum tax may apply when increases exceed 10 cents, but VAT on fuel is not expected to change.
