Portugal plans windfall tax on energy firms as Iran war drives prices higher

(Bloomberg) – Portugal plans to push ahead with a proposal to impose a windfall tax on energy companies to help cushion the fallout from spiraling costs for consumers and companies caused by the Iran war. 

Finance Minister Joaquim Miranda Sarmento said the proposed tax on energy companies’ profits will draw on measures used during the 2022 energy crisis.

“We will take the measures adopted in 2022, fine-tune and improve them and—in the near term—present a proposal to parliament,” Miranda Sarmento told reporters in Brussels in comments broadcast by RTP3 television station.

The Middle East conflict has sent energy prices surging as shipping through the vital Strait of Hormuz came to a near-halt, choking off oil, fuel and natural gas supplies from top producers in the Persian Gulf.

Portugal was among a group of several European Union countries, including Germany and Spain, that called for a windfall levy on energy companies’ profits in a letter to the EU Commission last month.  

The minister said that the countries that signed the letter are expected to “seek to coordinate responses,” while leaving the door open for other EU member states to join the initiative.

“We will aim for as much coordination as possible and also to learn from each other about potential measures each country may be preparing,” he said.

The European Commission has left it up to each member state to decide whether to implement such measures, Miranda Sarmento said.

When asked about the size and scope of the windfall tax, the minister said it was “premature” to elaborate on that. 

Portuguese oil company Galp Energia SGPS SA fell as much as 4.3%. EDP SA shares, which are trading ex-dividend on Tuesday, dropped as much as 5.6% in Lisbon.