Portugal gets ahead with tax aid for fuel while Spain waits: drivers cross the border to refuel
The escalation of oil prices caused by geopolitical instability in the Middle East has once again placed the cost of fuels at the center of the European debate. Given the volatility of the energy market, several governments have reacted with measures to cushion the impact on consumers. Spain, however, remains for the moment on standby. Meanwhile, Portugal has already activated a fiscal mechanism that reduces the price of fuel and which, furthermore, barely affects state revenue.
Portugal activates a fiscal mechanism that cushions the increases
The Portuguese Government has decided to intervene through a flexible formula: a temporary reduction of the Tax on Petroleum and Energy Products (ISP) when fuels register sharp increases.
According to the Portuguese Executive, the mechanism is activated when the fuel price increases approximately 10 cents per liter in a short period of time, at which point the State lowers part of the special tax to compensate for the increase at the pump. The latest application of this measure has meant a reduction of about 3.5 cents per liter in diesel, as reported by various European economic media.
The system has a clear fiscal logic. When the price of oil rises, the State automatically collects more through the VAT applied to fuel. By temporarily reducing the special tax, part of that increase in revenue is returned to consumers, softening the impact on the final price. According to the specialized media outlet El Periódico de la Energía, this formula allows cushioning the rise “without generating a significant impact on public revenue.”
Other European countries have also intervened
Portugal is not the only country that has decided to act. The tension in the energy markets is leading several European governments to apply measures to contain the price of fuel.
In Hungary, for example, the Executive opted for a direct intervention by setting a maximum price for gasoline and diesel, an extraordinary measure aimed at protecting consumers against the sharp rise in oil prices, according to the economic media outlet Demócrata.
Also Croatia has applied temporary price controls at the pump. The Croatian Government established a maximum limit on the cost of fuels to prevent the rise in crude oil from being fully passed on to the consumer, according to international agency Xinhua when detailing the package of energy measures adopted by the country.
In Slovenia, authorities have followed a similar strategy, combining regulated prices for gasoline and diesel with specific tax adjustments to stabilize the market. These types of measures have spread across several countries in Central and Eastern Europe, where governments have reacted more quickly to oil volatility, according to the specialized transport and logistics portal Trans.info.
For its part, Greece has opted for a different approach. The Greek Government decided to temporarily limit the profit margins of petrol stations and supermarkets to avoid speculative behavior in the face of rising crude oil prices, as reported by the agency Reuters.
Spain, still without measures for private drivers
In this European context, Spain is among the countries that still have not adopted a general fiscal measure for private drivers.
The Government has announced that it is studying possible actions to cushion the impact of rising fuel costs, although for the moment the proposed measures are mainly aimed at professional sectors such as transport or agriculture, large consumers of diesel.
Prudence contrasts with the movement of several European partners and with the Portuguese example, which has opted for a limited but immediate intervention.
The border effect: Spaniards who cross the “line”
The difference in policies is already starting to have visible consequences in border areas. When the price of fuel is slightly lower in Portugal, Spanish drivers cross the so-called “line” to refuel.
This phenomenon, known as petrol station tourism, is common on European borders when there are small tax differences between neighboring countries. As recalled by the specialized automotive portal Motor de El País, a difference of just a few cents per liter is enough for many drivers living near the border to choose to fill up on the other side.
Although the saving per refueling is usually modest —a few euros per tank—, the phenomenon repeats periodically in areas like Extremadura, Galicia or the south of Castilla y León.
Diesel, especially sensitive to energy crises
The impact of geopolitical crises is usually felt with special intensity in the diesel market, the fuel that moves most freight transport, agricultural machinery, and a large part of global logistics.
Europe, furthermore, largely depends on imports to cover its diesel demand, which makes its price react with particular speed to any alteration in the international oil market, as various energy analysts cited by The Guardian in its coverage of the recent tension in oil markets.
A Europe at different speeds
The current energy crisis is drawing a Europe at different speeds. In the east and southeast of the continent, governments have reacted quickly through price controls or fiscal interventions. In contrast, in several Western European countries —among them Spain— authorities continue to evaluate the market's evolution before adopting direct measures.
Meanwhile, Portugal has already taken the initiative with a mechanism that combines speed, flexibility, and low budgetary impact.
On the roads that cross the Spanish-Portuguese border, some drivers have already found their own answer: to cross a few kilometers to fill the tank where the liter is a few cents cheaper.