Photo: CNN Brasil.
Brazil’s federal government announced a new 30-day round of fuel-price relief on Oct. 9, extending existing measures and adding support for gasoline, ethanol and imported diesel. Reuters reported that the measures were announced by Finance Minister Dario Durigan and Planning Minister Bruno Moretti, who cited higher global oil prices amid the conflict in the Middle East. The announcement came about two weeks before the presidential runoff.
The government increased the gasoline subsidy from R$0.63 to R$0.89 per liter, effectively eliminating federal PIS/Cofins and Cide taxes on the fuel for the period. It maintained an existing ethanol tax exemption and expanded a separate ethanol subsidy. For diesel, it added R$1.40 per liter for imports on top of an existing R$2.12-per-liter benefit. The government said higher revenues from oil-related taxes, royalties and dividends would offset the fiscal cost; Reuters reported a projected additional cost of R$2.7 billion compared with the measures then in force.
Brazil exports crude oil but imports some refined fuels, so international prices can affect domestic supply and costs. The temporary subsidies may ease pressure at the pump, though their impact depends on how the relief is passed through the supply chain. Their short duration, fiscal cost and timing during a close campaign make the decision politically and economically consequential. The published figures document the policy; they do not establish whether the measures altered voter behavior or how much retail prices ultimately fell.