Petrobras Faces Extended Diesel Subsidy and Doubled LPG Funding to 660 Million Reais
PBR•Brazil’s government extended fuel price relief measures through July 31, preserving a diesel subsidy of 1.12 reais per liter and merging two April programs into a single mechanism. Liquefied petroleum gas support doubles funding to 660 million reais and tax exemptions on aviation kerosene and biodiesel blends continue.
1. Measure Extension
Brazil’s government prolonged emergency fuel relief measures through July 31, extending programs originally set to expire May 31. This decision maintains price stability efforts as global oil market volatility persists.
2. Diesel Subsidy Details
Starting June 1, domestic refiners and importers receive a 1.12 reais per liter subsidy on diesel, with two April subsidy schemes consolidated into one mechanism to streamline support.
3. LPG and Tax Relief
Federal funding for liquefied petroleum gas support rises from 330 million to 660 million reais, providing 11 reais per 13-kilogram cylinder. Exemptions from PIS and Cofins taxes on aviation kerosene and biodiesel blends are also extended through July 31.
4. Implications for Petrobras
Extended subsidies and tax relief measures may cap downstream fuel prices, potentially pressuring Petrobras’s refining margins. The government expects fiscal neutrality by offsetting costs with export-related revenues, aiming to preserve budget targets.
