Government accused of using Middle East crisis to boost fuel tax revenues

Portugal’s Socialist Party (PS) has accused the government of turning the Middle East conflict into “a fiscal opportunity”, claiming it has allowed motorists to shoulder higher fuel taxes while benefiting from rising inflation.

Speaking at the PS headquarters in Lisbon on Monday, André Moz Caldas, a member of the party’s National Secretariat, said the latest increase in fuel prices will further raise the cost of living for Portuguese households – accusing Prime Minister Luís Montenegro’s government of showing “complete indifference”.

“Fuel prices are rising significantly again today, making life even more expensive for Portuguese families,” said Moz Caldas, arguing that the centre-right government has failed to tell the public it has increased fuel taxation and has left those higher tax rates in place despite five months of elevated prices.

“The AD government has increased taxes on fuels and has maintained those increases throughout five months of rising prices,” he stressed.

Moz Caldas also criticised the government’s economic strategy, alleging it has refused to revise its inflation forecasts and is simply waiting for tensions in the Middle East to ease.

“The government has transformed a geopolitical crisis into a fiscal opportunity. The State cannot be the only one that benefits when everyone else is losing,” he said.

The Socialist Party notes that it has previously submitted parliamentary proposals aimed at reducing fuel taxes, all of which were rejected.

Moz Caldas argues that responsibility now rests with the government to intervene.

He warned that the PS could return to parliament with fresh legislative proposals if ministers continue to reject measures to ease the rising cost of living.

As he explained, drivers are now paying around 6.2 cents more in tax on every litre of petrol and 9.7 cents more on every litre of diesel than when the current government took office in 2024.

“The Portuguese are worse off, but the government is collecting more and more money from fuel taxes,” he said.

The criticism comes as renewed volatility in global oil markets has pushed up fuel prices across Europe, adding to inflationary pressures and increasing political debate over whether governments should use tax cuts to cushion consumers from higher energy costs.

It also comes in a week that will be marked by a State of the Nation debate, in which the government is certain to come under fire from all sides.

Source: Executive Digest

Natasha Donn

Journalist for the Portugal Resident.