Spain, Portugal head towards tighter lockdowns

Portugal will this week join Spain in declaring a state of emergency and plans tighter restrictions on mobility from 4 November, which could nip a fuels demand recovery in the bud.

Lisbon's move will keep 70pc of the population largely confined to their homes for at least 15 days. The government is also seeking powers to intervene in the energy sector, which it had under the country's previous state of emergency. These enabled it toregulate LPG prices and impose a temporary minimum physical blend rate for biodiesel.

Spain's six-month state of emergency, declared last week, does not give its autonomous regions the power to impose stay-at-home measures, but 13 of the 17 regions have restricted non-essential travel in and out of their territories. All regions except for the Canary Islands have cordoned off their most infected areas and imposed night-time curfews. Several, including Asturias and Andalucia, have requested the authority to impose stay-at-home measures, which the government has ruled out.

The lockdown measures in Spain and Portugal are less strict than those introduced in March. They permit international travel and restaurants and most shops in the 121 Portuguese districts affected by the lockdown and across most of Spain are allowed to stay open, albeit with narrower working hours.

The earlier lockdowns took Iberian fuels consumption to historic lows in April. Road fuels demand was down by 55pc on the year at 984,000t and kerosine demand was down by 93pc at 39,000t in Spain; in Portugal road fuels demand fell by 49pc to 240,000t and jet fuel demand fell by 95pc to 8,000t. Demand was clawing back to 2019 levels prior to the new restrictions. Portuguese road fuels demand was higher on the year for the first time in six months in September, when Spanish road fuels deliveries were just 6.5pc off levels of a year earlier.

By Jonathan Gleave