Cheaper diesel and petrol across the border. The cause is taxes. The differences can exceed half a euro per liter
Galp currently charges 36.6 cents more in Portugal than in Spain for a liter of single diesel; plus 51.4 cents for a liter of diesel +; plus 36.9 cents for a liter of gasoline 95; and another 51.4 cents for a 98 liter gasoline. The example of the Portuguese gas station is just one example among many.
The companies are the same, the prices are not. Galp, Repsol and BP are three of those who both have supply networks in Portugal and Spain, but prices across the border are very different today. Because of taxes.
Today, Monday March 7, fuel prices in Portugal saw the largest increase in a single week since the start of the price rise, which began in 2021 and worsened with the crisis in Ukraine. In fact, the increases were greater than expected: instead of 14 cents, simple diesel rose by 15.5 cents overnight (according to service stations); and instead of eight, gasoline 95 increased by 11 cents.
Comparing with the prices practiced today in Spain, the differences are obvious. In the following table you can compare the prices of diesel in these three networks in Portugal and Spain:
This comparison was made by CNN Portugal based on the prices displayed at the gas stations themselves, as when they were contacted they were not available to provide this information.
Remember that gas stations are free to set prices. This explains why until Sunday, increases of 8 and 14 cents were expected, respectively for gasoline at 95 cents and simple diesel, but the increases turned out to be more significant. Gas companies have decided to make larger increases than those resulting directly from the increase in oil prices last week, perhaps anticipating larger increases in crude oil and reductions in quantities sold. The companies involved were not available to explain this decision to CNN Portugal.
As for gasoline prices, the price differentials in Portugal and Spain are also different, always more expensive on this side than on the other side of the border.
The differences mainly result from the tax burden, with Portugal levying taxes above the European average, while Spain levies taxes below the European average.
This difference starts with the tax on petroleum products:
The ISP is also required to add VAT, whose rate in Spain is 21%, lower than the rate of 23% in Portugal:
In total, about 60% of the bill paid by the Portuguese translates into a tax burden, with the remaining 40% being shared between the gas station, transport and other processes to get the fuel to reach the pump.
In 2021, the Portuguese state will have collected around three billion euros from the ISP alone – Tax on Petroleum Products, which is taxed on every liter of fuel. A figure slightly lower than that forecast by the executive, in the 2021 state budget (3.4 billion). According to the 2022 document, however failed, the executive planned to fit this year 3.5 billion with this tax. Plus the corresponding VAT.