The new measures announced by the federal government to contain the rise in fuel prices will have an estimated cost of R$7 billion per month, said this Wednesday (9) the Minister of Planning and Budget, Bruno Moretti.
The package includes a reduction in taxes on gasoline and ethanol and a new subsidy for diesel, amid the rise in oil prices caused by the war in the Middle East.
“We are making use of the fiscal space we have, without asking for additional space,” said Moretti.
Gasoline and ethanol
Decree signed by President Luiz Inácio Lula da Silva reduces the PIS/Pasep and Cofins rates on gasoline by R$0.63 per liter, causing the charge to drop to R$0.16 per liter.
For hydrated ethanol, federal taxes will be temporarily zeroed, with a reduction of R$0.19 per liter.
The measures are valid from September 10th to October 9th and replace the previous gasoline subsidy of R$0.44 per liter. The estimated impact of the exemption on gasoline and ethanol is R$2 billion per month.
Diesel subsidy
Provisional measure authorizes a new subsidy of R$1 per liter of road diesel for producers and importers. The value will be regulated by the Ministry of Finance and reviewed every 30 days, and may be changed, interrupted or extended according to market conditions.
The estimated cost is R$5 billion in September, depending on companies' participation.
Total cost
Adding the new measures, the monthly impact reaches R$7 billion. With the current subsidy of R$1.12 per liter of diesel, which ends on September 27th and costs R$5.5 billion per month, the impact on public accounts in September will be R$12.5 billion.
Between March and August, the government spent or failed to raise R$25 billion on measures to contain fuel prices. With September, the bill reaches R$37.5 billion in 2026.
Features
The executive secretary of the Ministry of Finance, Rogério Ceron, stated that the government expects more than R$10 billion in extraordinary oil revenues to finance the exemptions.
“The estimate of extraordinary revenue for this period will be more than R$10 billion,” he said.
The diesel subsidy will be financed by extraordinary credit issued by provisional measure. The impact will be incorporated into the next Bimonthly Income and Expense Assessment Report, scheduled for September 24th.
The report provides guidance for implementing the Budget. If necessary, the government may block non-mandatory spending to comply with the fiscal framework's spending limits.
Oil rise
Moretti rejected the assessment that the package has a populist character and stated that the measures are temporary and seek to reduce the effects of the international oil price rise.
"This is a policy of price smoothing, of mitigating the effects of the war on derivative prices. Therefore, there is no artificial reduction. There is no relative price distortion, there is no, let's say, populist use of this instrument", he stated.
A barrel of the Brent type, an international reference, closed at US$ 101.21 this Wednesday, an increase of 3.36%. In a statement, Palácio do Planalto stated that “the measures seek to temporarily dampen the effects of this international situation on the domestic market”.
The Minister of Finance, Dario Durigan, defended temporary actions to protect the population and classified the adoption of “limited and temporary measures” as good practice.
According to the government, previous measures helped to contain prices. During the war, diesel fell 6% in Brazil, while it rose 25% in Germany. Despite the recent drop, Brazilian prices are still above pre-conflict levels.
