Brazil Extends Gasoline and Ethanol Tax Breaks Through Dec. 9

Overview

• A presidential decree published Monday in an extra edition of the Diário Oficial da União extends the zeroing of federal PIS/Pasep, Cofins and Cide on gasoline and the zeroing of PIS/Pasep and Cofins on ethanol through December 9, 2026.
• The decree keeps an additional subvention of R$0.428 per liter to ethanol producers to protect the fuel’s price competitiveness with gasoline.
• The Ministry of Finance estimates the 30‑day extension will cost about R$3.6 billion and says extraordinary petroleum revenues such as royalties and export taxes will be used to neutralize the fiscal impact.
• Diesel subsidies put in place in October remain part of the policy mix and the government signals a preference for gradual withdrawal tied to international oil‑price developments rather than an immediate end.
• The federal relief seeks to limit further retail price rises but does not guarantee lower pump prices because state taxes, distribution margins and import parity also affect final prices.