Portugal has announced a €2.4 billion relief package to help households manage the skyrocketing prices, including a cut to energy tax.

The Portuguese government has said it would provide a one-off payment of €125 as well as €50 per child, to everyone earning up to €2,700 each month.

In addition, pensioners will receive extra funding as a one-time payment worth half their monthly pension.

This funding is as well as a €1.6 billion relief package announced earlier in the year, Business Times reports.

“It has been 30 years since we have been confronted by such a sudden rise in the cost of living,” said Portugal’s Prime Minister Antonia Costa during a press conference, as he called for “caution against feeding an inflationary spiral”.

The government – which holds an absolute majority in parliament – will request lawmakers to vote for a VAT reduction on electricity, down from 13% to 6%, and will extend a reduction in fuel tax for the remainder of the year.

In addition, the Prime Minister unveiled a cap on rent rises in 2023 to 2% as well as a freeze on public transport fares.

Last month, consumer prices rose to 9% on an annual basis, as per a provisional estimate by the country’s official statistics organisation.

The government is set to announce another relief package for businesses, the Business Times report adds.

Soaring energy prices are impacting households and businesses all over Europe, as the continent shifts away from supplies from Russia following the invasion of Ukraine earlier in the year.