Brazil Extends Fuel Subsidies Through September 9

Overview

• The Ministry of Finance published an extension in the Diário Oficial da União confirming the gasoline subsidy of R$0.44 per liter and the diesel subsidy of R$1.12 per liter will run until September 9.
• The subsidies are paid directly to fuel producers and importers rather than given to drivers at the pump, a design meant to blunt retail price rises driven by higher global crude costs.
• Officials cite oil trading near US$85 a barrel and volatility caused by the Middle East conflict as the reason for maintaining the relief, but they must choose a new legal instrument when the provisional measure expires.
• The program has already strained public finances, costing about R$2.4 billion in its first two months, which raises pressure on the budget if support is prolonged.
• The subsidies were first introduced on May 25 as part of measures to contain rising oil‑related costs, and the coming legal decision will determine whether consumers keep that protection or face higher pump prices.