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Database of national-level policy measures

Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure PT-2021-43/2889 – measures in Portugal

Adjustment of the Tax on Petroleum and Energy Products for citizens

Ajuste no imposto sobre os produtos petrolíferos e energéticos (ISP)

Country Portugal , applies nationwide
Time period Temporary, 21 October 2021 – 31 December 2022
Context COVID-19, War in Ukraine
Type Legislations or other statutory regulations
Category Responses to inflation
– Support for energy bills
Author Ana Teixeira - CESIS
Measure added 14 September 2022 (updated 21 September 2022)

Background information

The Portuguese Government has issued a set of measures with the objective to support families and consumers in general, amidst the rising prices of fuel and other energy products, as a consequence of the COVID-19 pandemic and the further exponential increase in energy prices as a consequence of the war in Ukraine.

This measure intends to adjust the level of the Tax on Petroleum Products according to the excess fiscal revenue obtained through VAT applied to fuel. The reason for this measure is that governments have increased their VAT revenue significantly, given the rise in petroleum prices. In order to compensate consumers, this measure translates an effort to cut down on the excess revenue, by lowering the Tax on Petroleum Products. Contrary to VAT, ISP is not a variable tax (based on a percentage) but a fixed cost tax. According to the newspaper Diário de Notícias (Diário de Notícias, 8 March 2022) this measure was announced at the end of a meeting with the national Social Partners group (Concertação Social).  Since this is a fixed amount tax, it will have a weekly review in order to set the tax value depending on the variation of petroleum products’ price.

As part of the mitigation measures approved by the Government, in order to face the extraordinary context of rising fuel prices, a mechanism was established for an extraordinary and temporary reduction of the ISP unit rates applicable, on the mainland, to unleaded gasoline and diesel.

Content of measure

Ordinance 208-A/2021, of 15 October, is the first amendment of the original Ordinance 301-A/2018, of 23 November, which sets the value of the unit rates of the tax on petroleum and energy products (ISP) applicable in Portugal´s mainland, to unleaded gasoline and road diesel. With Ordinance 208-A/2021, of 15 October, the Government introduces, on an extraordinary and temporary basis, a reduction in the tax rate on petroleum products (ISP) applicable to gasoline and diesel, at the unit value of 2 cents per liter and 1 cent per liter, respectively, in order to ensure that the additional gain in VAT arising from the increase in fuel prices is fully returned to consumers through a proportional reduction in ISP unit rates. The government also establishes that the measure now taken will be subject to constant monitoring so that it is adjusted according to market developments.

Ordinance 208-A/2021, of 15 October, was amended by Ordinance 63-A/2022, of 31 January, which sets an updated value of the unit rates of the tax on petroleum and energy products (ISP). Ordinance 208-A/2021 and 63-A/2022 were revoked as of 14 March 2022, by Ordinance 111-A/2022, of 11 March, where the Government decides to maintain the ISP reduction and determines the temporary implementation of a weekly mechanism, based on the introduction of a formula, for reviewing and fixing the values of the unit rates of the tax on petroleum and energy products (ISP) applicable, on the mainland, to unleaded gasoline and diesel for road use.

Ordinance 11-A/2022 is maintained in force by a set of Ordinances that also revise and update the values of the tax rates on petroleum and energy products on a regular basis. The latest update was done through the Ordinance 217-B/2022, of 31 August.

On 5 September the Government announced that the reduction in the tax rate on petroleum products (ISP) will continue until the end of the year (Government Press Release, 5 September 2022).

Use of measure

No information to date.

Target groups

Workers Businesses Citizens
Does not apply to workers Does not apply to businesses Applies to all citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Informed Informed
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • Unknown
  • Main level of involvement: N/A


No involvement of any social partner in the implementation and monitoring of the measure.

Views and reactions

According to Jornal de Negócios (Jornal de Negócios, 8 March 2022), the government met with the Social Partners before the launching of a set of measures, including the ISP reduction. The representative of the Business Confederation was satisfied with the measures in preparation. The representative of the union General Confederation of Portuguese Workers (CGTP) showed concern with the fact that the measures were more directed at businesses in detriment of families, while the General Union of Workers' representative was concerned about guarantees with the refugees' life conditions.

The social partners will participate in weekly meetings with a consultative committee regarding the effects of the crisis generated by Ukraine´s invasion.



Eurofound (2022), Adjustment of the Tax on Petroleum and Energy Products for citizens, measure PT-2021-43/2889 (measures in Portugal), EU PolicyWatch, Dublin,


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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.