Portugal approves 33% windfall tax on oil companies' excess profits

Portugal's government said on Thursday it had approved a 33% windfall tax on extraordinary profits earned in 2026 ​by oil and refining companies benefiting from an energy ‌price surge triggered by the Iran war.
The finance ministry said in a statement that the windfall tax would be levied on the portion of ​companies' 2026 profits that exceeds by more than 20% ​the average profits recorded in 2024 and 2025.
It said ⁠that, while households and businesses have faced sharply rising costs ​amid soaring fossil fuel prices, oil and refining companies had ​generated extraordinary profits "resulting solely from external market conditions."
"It is therefore fair and necessary to create a solidarity mechanism by taxing part of these exceptional profits ​to help finance measures to offset the impact of higher ​fuel prices on households and the most vulnerable businesses," it said.
The measure ‌will ⁠also support investments aimed at reducing dependence on fossil fuels and contribute to a more sustainable and resilient economy, it said.
Its introduction revives a tax similar to the one Portugal imposed during ​the 2022 energy ​crisis triggered ⁠by Russia's invasion of Ukraine.
The levy will hit all oil companies operating in Portugal, including Galp ​Energia, which posted a 45% surge in second-quarter ​adjusted ⁠net profit to €540 million on Monday as the Iran war lifted crude prices and refining margins, prompting the company to raise its ⁠2026 ​dividend by 10%.
The measure will now be ​submitted to parliament for final approval, where it is expected to secure support ​from all opposition parties.


-Reuters