The Portuguese Association of Distribution Companies (APED) asks the Government to change fuel taxation, protecting consumer confidence in the economy, says the entity’s general director in an interview with Lusa.
Gonçalo Lobo Xavier recalls that at the end of February, the National Statistics Institute (INE) “already had a drop in consumer confidence, after two months of growth”, and that without “the impact of the Middle East”.
With the conflict in Iran and the uncertainty about when it will end, “what we are asking the Government now is a simple thing, which is to protect consumers’ confidence in the economy, relieving them, as much as possible, of the dynamics in which the Government can enter, and doing the opposite of what has been done in other crises”, in the sense of “protecting consumers from this shock that is happening”, says the director general of APED.
“How do you protect yourself? Now, in this case, fuels in Portugal, between ISP [Imposto sobre Produtos Petrolíferos]plus carbon tax, plus VAT, have a tax rate much higher than the European average”, points out Gonçalo Lobo Xavier.
At this moment, “the only thing, the only way, is to cut taxes”, but of course “I do not want, in any way, to resort to the disarray of public accounts”, asserts the person in charge.
“We are not facing a retail functioning problem, retail continues to function”, whether food or specialized, “but there is a real risk with this external shock, caused by the increase in energy costs which will also cause a shock in consumer confidence”, warns the general director of APED.
Therefore, “we will continue to preserve supply, because there is no risk of product supply at this time”, he reiterated. Now, “there is a risk of the entire value chain being contaminated with increases in energy costs.”
In other words, “from the agricultural producer, with their machines, to the logistics part, to the agroindustry, all of these will, in fact, be pressured to increase prices due to the increase in costs, and it will be the retail sector that will be the messenger, once again, and deliver the bad news”, he laments.
On the distribution side, “the only thing we can control are our margins, which are already small”, food retail margins are in the order of 2% to 3%, he recalls.
In fact, “prices have not increased anymore because there is a lot of competition, and retailers have squeezed their margins to avoid losing customers and to have products on the shelf at reasonable prices.” Now, “if the problem is the rise in fuel prices, let’s change fuel taxation”, reinforces Gonçalo Lobo Xavier.
However, APED does not advocate changing food taxation (VAT).
“We need to change the VAT on fuels and other tax components, these are things that the Government can change, more than other ideas that arise from time to time such as Zero VAT, which is an issue that is to be used in case of emergency, it was an exceptional measure, and we think that we have not yet reached a point of inflationary pressure that justifies this change”, he considers.
“It was a very useful measure at the time it was taken”, emphasizes the general director.
Now, “there’s the fuel tax, there’s the carbon tax, there’s the VAT, I mean only one of those has to be more or less requested from Brussels, which has to do with […] the carbon tax, the rest the Government has the flexibility to change”, he concludes.
Gonçalo Lobo Xavier also recalled that the prices of some product categories had already been increasing since November, although olive oil was showing signs of falling, for example. Then the beginning of the year brought the new supplier price list, in addition to the update of labor costs, highlighting several production factors on the rise.
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