Brazil abolishes federal gasoline taxes for 30 days — The Rio Times
On October 9, the Brazilian government abolished federal taxes on gasoline for 30 days. The decree, announced by the Ministry of Finance in Brasília, increased the tax relief to 0.89 Brazilian reais per liter. The Rio Times reports.
The decision was made 16 days before the second round of the presidential election, scheduled for October 25. President Luiz Inácio Lula da Silva and Rio de Janeiro state senator Flávio Bolsonaro are expected to compete in it.
What the decree provides for
The relief applies to three federal levies: PIS/Pasep, Cofins, and Cide-Combustíveis. Its amount increased from 0.63 to 0.89 reais per liter of gasoline A — fuel intended for blending with ethanol. Of this amount, 0.79 reais account for PIS/Pasep and Cofins, while another 0.10 reais account for Cide.
For hydrated ethanol, which is sold at gas stations as an alternative to gasoline, the zero PIS/Pasep and Cofins rate remains in place, equivalent to 0.19 reais per liter. At the same time, the subsidy for ethanol producers was increased from 0.251 to 0.4287 reais per liter.
More current news is available on the UA.News Telegram channel Telegram.
The authorities also plan to increase support for importers of automotive diesel fuel by 1.40 reais per liter. This amount supplements the existing aid of 2.12 reais per liter, which will also be in effect for 30 days. According to the Ministry of Finance, Brazil imports about 33% of the diesel it consumes.
Cost of the measures and expected effect
According to government estimates, tax relief for gasoline and ethanol will cost 3.6 billion reais in 2026. Additional aid for diesel imports will amount to 1.6 billion reais over 30 days.
The Ministry of Planning stated that the relief for gasoline and ethanol will be offset by extraordinary federal oil revenues. The government expects that the average price of gasoline at gas stations may decrease by up to 0.26 reais per liter, but the actual effect will depend on whether gas stations and distributors pass the tax cuts on to consumers.
Planning and Budget Minister Bruno Moretti said that Brent crude prices had exceeded $100 per barrel, compared with about $70 before the start of the conflict in the Middle East. Flávio Bolsonaro called the government measures an election-season stroke of the pen.
