The release of strategic oil and/or gas reserves by several countries, notably those from the G7 (some of the seven largest in the world), is a measure that, if applied, would only have “a temporary effect”, with “the reserves being used for emergency situations in which there are cuts in supply”, in which suddenly, “there was no oil or diesel supply”, considers the Portuguese Minister of Finance, who raised many doubts about the effectiveness of such a brake.
However, this Monday, in statements at the entrance to the Eurogroup meeting (the informal European council that brings together Eurozone finance ministers), Joaquim Miranda Sarmento is once again confident that the European Commission will stop censoring support for the consumption of diesel and gasoline in terms of Tax on Petroleum Products (ISP) because this is again justified to “relieve a critical situation“. This type of support was created by the previous PS government, in 2022, following the war in Ukraine. Now, the new war with Iran demands the measure again.
Regarding existing reserves, the minister estimates that they are only enough for around 90 days, in the case of oil. REN says the country’s gas reserves last up to 93 days.
In other words, if the country were to release oil or gas to provide assistance at the international level of the kind, which is being studied, to control prices, Portugal would be much more vulnerable or close to a situation of rupture if, for example, the war with and against Iran does not end the “short stretch”.
Joaquim Miranda Sarmento commented on the results that are becoming known from this meeting, which took place this Monday, when the price of oil reached almost 120 dollars per barrel, already generating panic in the markets and among politicians.
The finance ministers of the G7 (seven major economies in the world – Germany, Canada, the United States, France, Italy, Japan and the United Kingdom, although the European Union also has a seat) were trying to reach an agreement to release part of their strategic reserves onto the market, but it was not possible. We are not at the right time yet, a diplomatic source revealed to Reuters.
This meeting took place because oil reached almost 120 dollars per barrel this Monday. Then it eased to the border of 88 dollars with that perspective.
According to Reuters, G7 energy ministers will hold a conference call on the same topic this Tuesday and G7 leaders (presidents and prime ministers) later this week, said the same source. “In my opinion, the final decision will be up to the leaders,” concluded a senior official cited by the agency.
Miranda Sarmento expressed little confidence in relation to this international measure.
“It may have some effect on prices, but reserves are also limited. I believe Portugal has a reserve for around 90 days, I’m talking about color, my colleague from Environment and Energy [Maria Graça Carvalho] will certainly have more reliable data”, commented the Minister of Finance.
For the Minister of Finance, “there may even be a small margin here in the short term, but we cannot neglect the purpose of these reserves, which is exactly to be used in a situation of supply cuts, so that countries have the capacity to maintain some services”.
“Note: if the conflict lasts for a long time, [libertar reservas estratégicas] It has a temporary effect and is used for emergency situations in which there are cuts in supply. Imagine that suddenly there was no oil or diesel supply. What would we do with ambulances, fire engines, police cars, etc.?“, asked Sarmento to journalists in Brussels.
Brussels will let governments support ISP
As for ISP support, the minister said that it is to continue. “If gasoline next week increases by more than ten cents compared to last week, the discount on gasoline and the total value accumulated since the increase began will also be valid.” This Monday, the liter of diesel already benefited from this support as it would rise by almost 24 cents. With the subsidy, the increase was 19 cents.
“We informed the Commission, but it was temporary and extraordinary support”, which “addresses a critical situation, but which we We hope it can be resolved soon“, “I don’t think the European Commission has any objection”, said Miranda Sarmento.
Regarding public accounts, the minister softened his position. “We remain committed to balancing public accounts, reducing public debt”, “the good results in 2025 allowed us to look at 2026 as a slightly less narrow path, but now, with the train of storms and this conflict, the path has become quite narrow again”. Thus, “we cannot exclude deficit situations.”
Leave a Reply