Emergency measures aim to avoid inflationary pressure in Portugal

The Portuguese Minister of the Presidency said that the emergency measures for energy and agri-food prices seek to provide a focused response that avoids a spiral of inflationary pressures, Mariana Vieira da Silva said.

“All the extraordinary measures that we are presenting here are in addition to others and, as during the pandemic, we will never hesitate to take further measures when they are necessary to respond to the evolution of this situation,”.

In a press conference, the minister announced, as part of the containment of energy prices, a reduction in fuel tax equivalent to the reduction of VAT to 13%, which corresponds, based on last week’s prices as a result of this average, to 0.215 cents/liter less for diesel and 0.207cents/liter less for petrol, and the suspension of the increase in the carbon tax until June and quarterly reassessment until the end of the year without a total replacement.

According to the minister, the government intends to create professional gas, make tax payments more flexible and defer social security contributions for the sectors most vulnerable to increases in energy costs.

A subsidy to support the increased gas costs of energy-intensive companies, a reduction in electricity tariffs for electro-intensive companies and a 30 cent per litre discount on fuel for the social sector were also announced. The government has also announced a package of measures for agriculture and fisheries.

It is also planned to mobilize 18.2 million euros  of national resources to mitigate increased costs with animal feed and fertilisers, as well as the “use of the balances carried over from the Salary Compensation Fund in the fisheries sector to support increases in production costs.” In addition, the government foresees the extension of support measures for the food basket price, of 60 euros, to all families that receive minimum social benefits as of May.