Soaring fuel prices have added more than €3 million to three Portuguese Navy and Air Force supply contracts, with the Defence Ministry admitting that higher costs are now having an impact on the Armed Forces’ day-to-day activity.
CNN Portugal reported this Monday on the impact of the rising costs, which have hit the Navy particularly hard. The price of marine diesel has doubled since the beginning of the year, with the Navy estimating that it will need around €7.9 million to cover its operational fuel requirements in 2026 – some €2.4 million above the spending limit previously authorised by the government.
One of the biggest increases involves a three-year contract signed with Petrogal in March to supply marine and other diesel to Navy vessels between 2026 and 2028.
Initially valued at €16.62 million, the contract was revised in September to €18.22 million, an increase of almost €1.6 million in just six months.
Contract documents cited the evolution of international oil prices and noted that the price of marine diesel had doubled since the start of 2026.
The increase has created an immediate budget problem for the Navy.
The government had authorised spending of up to €5.51 million on these fuels in 2026, but the Navy now estimates that €7.9 million will be needed to meet its planned operational requirements.
It submitted a proposal to Defence Minister Nuno Melo in June seeking to update and reschedule the expenditure.
According to the documentation, supplying fuel to Navy ships is considered a “critical factor” in ensuring they can carry out their missions continuously and when required.
Road fuel contracts also soar
The Navy has also had to revise a separate contract with Petrogal covering fuel for its road vehicles.
That agreement, signed in December 2025, increased from approximately €1.10 million to €1.46 million in September – an additional €362,200, or around 33%.
The revision attributed the increase to greater fuel-price volatility and significant price rises linked to the worsening crisis in the Middle East and disruption around the Strait of Hormuz.
The Air Force has faced an even larger percentage increase in one of its road-fuel contracts, CNN Portugal reports.
An agreement with Repsol, originally worth a maximum of €606,504, was revised in March to €1.66 million, an increase of just over €1.05 million.
The documentation attributes the change to an extraordinary price revision allowed under existing legislation, although it does not specify how much of the increase reflects a higher price per litre and how much, if any, results from greater quantities being required.
Across the three contracts, the revisions amount to more than €3 million in additional spending.
Ministry of Defence admits impact on routine activity
The Ministry of Defence has acknowledged that the increases are forcing all three branches of the Armed Forces to adapt.
“Due to successive and significant increases in fuel prices, the Armed Forces need to make contractual adjustments, with increases in value, for the acquisition of road and operational fuel for their naval, land and air assets,” an official ministry source told CNN Portugal.
The ministry also conceded that higher costs are having “some impact on day-to-day activity”, requiring the Armed Forces to “optimise travel and activities in other areas of routine operations”.
It stressed, however, that military operations remain within their planned levels and that the Armed Forces retain full capacity to respond to operational needs.
Former director-general for Maritime Policy João Fonseca Ribeiro told CNN Portugal that when military budgets remain unchanged, higher fuel prices inevitably reduce the amount of activity that can be carried out unless additional funding is provided.
He pointed to earlier periods of fuel-price pressure in the late 1980s and 1990s, when the Navy received instructions to reduce sailing hours to keep spending within budget.
In the current situation, he said the Armed Forces may once again have to reassess priorities if costs continue to rise, although essential missions such as national defence, surveillance of Portuguese waters and search and rescue would have to be protected.
The pressure comes amid a broader fuel-price surge across Europe, driven in part by disruptions to refined fuel supplies and instability in the Middle East.