On Friday afternoon, the Secretary of State for Finance announced that the government would hand over to the public € 63 million in VAT levied on an increase in the average selling price of fuel while Internet service providers cut rates.
“Today the government has decided to restore the model of refund of tax revenues received from the price of fuel. Due to the increase in the average selling price of fuel for the population, the state is levying VAT in the amount of more than 60 million euros, and therefore this increase in ISP rates will be reflected in a decrease, ”the government official said. on Friday, adding that the measure would mean “a two-cent reduction in ISP gasoline and one cent in ISP diesel.”
In total, the amount that will be refunded by the government reaches 90 million euros, as 63 million euros as VAT adds 27 million euros to the rounding of the ISP relief.
“This € 63 million is actually € 90 million per year, as the impact of the additional revenue we get from fuel will make the provider’s one-off fee [Imposto sobre Produtos Petrolíferos] diesel fuel has been reduced by less than a cent and we rounded it to the nearest cent, ”Antonio Mendonça Mendes explained to reporters at a press conference at the Ministry of Finance in Lisbon.
The government spokesman also explained that the government will monitor changes in the average selling prices for the population and, if necessary, “revise upward”, “in order to recover the entire amount of added VAT.”
In 2016, the government already used a similar mechanism when fuel prices were lower, increasing the number of Internet providers to compensate for the drop in VAT.
“Now we are using the same mechanism, but vice versa, since we receive more revenue from VAT than we expected. We will fully refund this VAT revenue to consumers by temporarily lowering the specific ISP rate for gasoline and diesel fuel in the appropriate proportion, ”stressed Antonio Mendonça Mendes, now operators can reflect this reduction in the selling price for the population.
The government also indicated that the indicators in its possession indicate that there will be a decline in prices in the fuel markets, which is an exceptional situation.
Despite a possible drop in prices on fuel markets, the measure will take effect today and will last until January 31, 2022.
Also on Friday, Bank of Portugal Governor Mario Centeno said that the rise in prices, in particular for fuel, should be temporary, despite the fact that it “clearly got out of control”, noting that during the crisis, oil traded at negative prices …
“Analyzes at the European level tell us that the impact is temporary and financial. […]… I want to remind you that during the crisis, oil traded at negative prices, ”said Mario Centeno, speaking after lunch at the American Chamber of Commerce in Portugal.
However, as he pointed out, we are now seeing a reversal of this scenario “on a significant scale and only obviously uncontrollable.”
The former minister also noted that all scenarios point to temporary inflation and, in particular, in Portugal, held back at 0.9% in 2021 as a whole.
Lusa has contacted the Portuguese Association of Petroleum Companies (Apetro) and the National Association of Fuel Dealers (Anarec), but has not been able to receive comment so far.
According to the proposed state budget for 2022, presented to parliament on Monday, surcharge from ISPs will remain next year at € 0.007 per liter for gasoline and € 0.0035 per liter for road diesel and non-ferrous and labeled diesel fuel.
