Government already under fire for ‘huge spike’ coming in fuel prices
Consumer protection association DECO has called for a VAT reduction on bottled gas – the fuel still used for cooking/ heating water in over 2.2 million homes. (Right now, VAT is charged at 23% on bottled gas – whereas across the border in Spain, gas is considered a necessity and charged at the lowest VAT rate, which in Portugal is 6%. This, and a different approach generally in Spain, sees the price of bottled has roughly half that of the prices charged in Portugal.)
DECO’s call comes the day before fuel prices generally are due to see their largest increase in the last three years – threatening a number of sectors beyond the immediate ‘victims’ of drivers – and just as PS Socialists accuse the government of ‘having lied’ when it said the State Budget for 2025 did not imply any tax increases.
“We need to believe those who govern us; we need them to do what they say”, PS secretary general Pedro Nuno Santos thundered in a speech to Socialist party faithful last night.
From Monday, the cost of diesel is due to increase by roughly 5.5 cents per litre; the price of petrol by around 3 cents. The increases will end up having a knock on effect on businesses, people’s livelihoods, and, invariably, the prices of bottled gas.
This is one of the many reasons for DECO’s call for a VAT reduction. Treating bottled gas as the necessity it is (not a luxury for households that have no other option) and charging only 6% VAT, instead of 23%, would minimise the effect of any price increases.
Another is the fact that since 2019 electricity and natural gas have had their VAT levels reduced to 6%. Households on bottled gas invariably have no access to natural gas, thus they are being negatively discriminated against when they are almost always the households/ people on the lowest incomes.
According to Lusa, the 2.2 million households served by bottled gas translate into a universe of around 5 million people (which is roughly half the population), thus the necessity for the government to make a decision as prices start increasing.
Lusa stresses that there is the ‘Bilha Solidária’ programme (which provides for the payment of €10 per bottle per month for families on the ‘social tariff’) but this discount (unlike electricity and gas) is not applied automatically. The bureaucracy and lack of information about the programme means “most families don’t know it exists”, complains DECO.
Added to this is the fact that consumers have to buy the gas first and only then receive the discount. “This is a bit complicated for families in need,” says DECO lawyer Elisabete Policarpo.
While the government has yet to respond to DECO’s call, the country is bracing for the new price increases at the pumps from first thing tomorrow morning.
natasha.donn@portugalresident.com
ENDS
