According to a press release sent to The Portugal News by the International Drivers Association, fuel is surprisingly cheaper in Portugal than its neighbouring countries.

Factors Influencing Gas Prices in Portugal

Taxation Policies:

Portugal's relatively lower fuel taxes play a pivotal role in maintaining affordable gas prices. While neighbouring countries might impose higher taxes on fuel, Portugal has adopted a more moderate approach, preventing a significant burden on consumers. The difference in tax policies can be observed in countries like the UK or Spain, where higher fuel taxes contribute to elevated gas prices.

Supply and Demand Dynamics:

The balance between supply and demand is a critical determinant of fuel prices. Portugal has managed to maintain a stable equilibrium, ensuring a steady supply of fuel to meet the demands of its consumers. In contrast, other countries may grapple with supply chain disruptions or increased demand, leading to higher prices at the pump.

Market Competition:

The level of competition among gas retailers also plays a crucial role in determining prices. In Portugal, a competitive market encourages retailers to offer competitive prices to attract customers. A report conducted by the International Energy Agency (IEA) found that countries with higher market competition tend to have lower gas prices due to increased efforts by retailers to stay competitive.

How do energy costs differ in other parts of Europe?

According to the Household Energy Price Index, the Czech Republic, the UK, and Italy stand out for having some of the highest gas prices in Europe. This disparity highlights the diversity of energy pricing strategies across the continent. While Portugal adopts a balanced approach to taxation and foster's market competition, other countries may face challenges resulting in higher energy costs for consumers.


In the Czech Republic, the UK, and Italy, factors such as taxation policies, supply and demand dynamics, and market competition contribute to the overall cost of gas. For instance, higher fuel taxes and supply chain disruptions may contribute to the comparatively elevated gas prices in these nations. The contrast with Portugal's more affordable gas prices underscores the importance of a multifaceted analysis when examining energy pricing trends.

While gas prices go up and down in nearby countries due to different economic and world situation reasons, Portugal stands out in Europe because it has smart ways of dealing with taxes and market factors. Portugal's success in keeping gas prices lower can teach leaders and economists valuable lessons on how to make energy affordable for people, especially as we face changing global fuel costs.

Dominic Wyatt, a motoring expert at International Drivers Association, shares "Portugal's gas pricing model offers insights into how a thoughtful balance of taxation and market competition can benefit both consumers and the economy."