Portugal's cabinet on Thursday approved a 33% windfall tax on extraordinary profits earned in 2026 by oil and refining companies that benefit from an energy price surge linked to the war in Iran, multiple news outlets reported on Thursday.
The finance ministry reportedly said the levy would apply to the portion of companies' 2026 profits that exceeds by more than 20% the average profits recorded in 2024 and 2025, adding that the tax was justified as households and businesses faced sharply higher costs from rising fossil fuel prices, while oil and refining companies generated exceptional profits resulting solely from external market conditions.
The proceeds are to help fund investments aimed at reducing dependence on fossil fuels and strengthening the economy's sustainability and resilience.
The new levy will apply to all oil companies operating in Portugal, including Galp Energia, the country's largest integrated energy company.
The measure will now be sent to parliament for final approval, where it is expected to receive backing from opposition parties, Reuters reported.
The Portuguese Ministry of Finance did not immediately respond to a request for comment by.