Fuel Prices in Portugal: Why the Pump Stays Expensive
Portugal is one of the pricier places in the world to fill up a tank. The current retail price of gasoline sits at about $2.142 per litre (roughly €1.88 at the local pump), which works out to around $8.11 per US gallon. Diesel is a touch cheaper at $2.025 per litre. Globally, Portugal ranks 156th out of 170 countries by fuel price — meaning only a handful of nations charge more. For context, the world average gasoline price is just $1.484 per litre, so Portuguese drivers pay over 40% more than the typical global motorist.
What Actually Drives Portuguese Pump Prices
The single biggest factor is taxation. Portugal layers two heavy taxes onto every litre: the Imposto sobre os Produtos Petrolíferos e Energéticos (ISP, the fuel excise duty) and a 23% VAT (IVA) applied on top of the already-taxed base. Combined, taxes typically account for well over half the price you see on the board. This is the defining feature of Western European fuel markets — and it is why Portugal looks expensive next to countries with lighter fuel taxes, even though the raw cost of the oil behind the fuel is identical worldwide.
Portugal is also a near-total oil importer. It has no meaningful domestic crude production and refines or buys finished products that arrive by sea, so the country is fully exposed to international crude benchmarks and global refining margins. Unlike an oil exporter that can subsidise domestic fuel, Portugal has limited room to shield consumers from price swings — and historically it has chosen to tax fuel as a revenue source rather than subsidise it.
Currency, the Euro, and the USD View
Because Portugal uses the euro, the USD figures quoted here move partly with the EUR/USD exchange rate. When the dollar strengthens against the euro, Portugal's prices look cheaper in dollar terms even if the local euro price at the pump hasn't changed. Crude oil is priced in dollars globally, so a weaker euro also makes imported fuel more expensive for Portuguese refiners and retailers — a double effect that euro-zone neighbours like France and Italy share.
The Ten-Year Trend
Portugal's price history tells a clear story of volatility around a steadily high baseline. Between July 2016 and June 2026, the average price was $1.834 per litre. The cheapest fuel ever recorded was $1.412 on 4 May 2020 — the depths of the COVID-19 demand collapse, when crude briefly cratered. The peak came on 13 June 2022 at $2.471 per litre, driven by the post-pandemic demand surge and the energy shock following Russia's invasion of Ukraine. Today's $2.142 sits well above the decade average, showing that prices have settled into a higher band than the pre-2022 norm.
Among heavily taxed European markets, Portugal lands in familiar company — comparable to Greece and still below the global record-holder, Norway. You can compare it against every other country on our world fuel prices page.
FAQ
Why is fuel so expensive in Portugal?
The main reason is tax. Portugal applies a fuel excise duty (ISP) plus 23% VAT, which together make up more than half of the pump price. Add to that the fact that Portugal imports virtually all of its oil and pays in dollar-denominated crude, and you get one of the higher fuel prices in the world — about $2.142 per litre.
How much does gas cost per gallon in Portugal?
At the current rate of $2.142 per litre, a US gallon of gasoline in Portugal costs roughly $8.11. Diesel is slightly cheaper at about $2.025 per litre. Locally, drivers see prices around €1.88 per litre on station signs.
Is fuel cheaper in Portugal than the rest of Europe?
Portugal is on the expensive side of Europe but not the most extreme. It ranks 156th of 170 countries worldwide. It tends to run similar to Greece and France, while Norway remains pricier. The shared driver across these markets is high fuel taxation rather than the underlying cost of oil.