Brazilian government extends fuel price tax measures by one month
Brazil has extended fuel tax measures by one month and announced new subsidies to mitigate the impact of global oil prices.
The Brazilian government has extended the duration of support measures for fuel prices by one month and announced new incentives aimed at easing the impact of rising global oil prices on consumers.
Scope of Tax Measures
In line with the decision announced on Friday, the burden resulting from PIS/COFINS and CIDE taxes under the gasoline decree will be reduced by 0.89 reals per liter.
Thanks to this new decision, federal taxes on gasoline will effectively be reduced to zero.
Election and War Claims
The decision was evaluated among the steps taken by President Luiz Inacio Lula da Silva ahead of the second round of the presidential elections.
Deputy Finance Minister Dario Durigan stated that the measures were not connected to the election, but were announced following the war initiated by the US and Israel against Iran.
Ethanol and Diesel Support
The reduction of 0.19 reals per liter applied to PIS/PASEP and Cofins taxes on ethanol has also been extended.
An additional subsidy of 1.40 reals per liter will be provided to road transport diesel importers for 30 days.
Budget Costs and Expectations
The tax regulations for gasoline and ethanol are estimated to cost 3.6 billion reals to the 2026 budget.
Planning and Budget Minister Bruno Moretti stated that they expect the supports to reflect on consumer prices and provide a decline.