Brazil Extends 1.12-Reais Diesel Subsidy Through July and Doubles LPG Funding
UGP•Brazil’s government extended diesel subsidies of 1.12 reais per liter and merged two support programs into one through July 31 to limit price increases. Federal funding for LPG support doubled from 330 million to 660 million reais, while tax exemptions on aviation kerosene and biodiesel blends also continue.
1. Extension of Diesel Subsidy Measures
Diesel subsidy of 1.12 reais per liter has been extended through July 31, replacing two separate programs with a single mechanism aimed at stabilizing domestic fuel prices for refiners and importers.
2. Increased LPG Subsidy Funding
Federal funding for the LPG support program was raised from 330 million to 660 million reais, maintaining an 11 reais subsidy per 13-kilogram cooking gas cylinder for the extended period.
3. Continued Tax Exemptions for Aviation Kerosene and Biodiesel
Exemptions from PIS and Cofins taxes on aviation kerosene and biodiesel used in mandatory diesel blends have been prolonged through July 31 to further curb fossil fuel costs.
4. Fiscal Impact and Budget Neutrality
The initial relief package was estimated to cost around 10 billion reais, with anticipated offsets from oil export taxes and related revenues, and the government reiterates its commitment to meet 2026 budget targets.
