Politics · Brazil · 1 day ago
Brazil cuts fuel taxes and extends subsidies before presidential runoff
Brazil’s government has cut taxes on gasoline and expanded subsidies for diesel imports.
The measures were announced on October 9, just over two weeks before the October 25 presidential runoff.
President Luiz Inácio Lula da Silva is seeking a fourth, nonconsecutive term against Senator Flávio Bolsonaro, son of former President Jair Bolsonaro.
Bolsonaro received more votes than Lula in the first round, and has criticized the government over the cost of living.
The government says the cuts are intended to ease fuel prices and support fuel supplies as international oil and refining costs rise during the war with Iran.
Brazil produces and exports crude oil but still imports refined fuels, and diesel costs can affect freight and food prices.
The government says oil revenues will offset the cost of the measures, which include a 30-day gasoline tax exemption and increased diesel subsidies.
Brazil’s government announced temporary fuel tax cuts and expanded diesel subsidies on October 9, ahead of the October 25 presidential runoff.
The measures eliminate federal taxes on gasoline imports and sales for 30 days, with a possible extension.
Diesel importers will receive an additional subsidy of 1.40 reais per liter for 30 days, on top of an existing 2.12-reais subsidy.
The government said revenues from oil assets would offset the fiscal impact of the measures.
Flávio Bolsonaro criticized the move, warning that diesel prices could rise after the election.
- Who
- President Luiz Inácio Lula da Silva’s government announced the measures. Lula faces Senator Flávio Bolsonaro in the runoff.
- What
- The government temporarily eliminated federal gasoline taxes and expanded subsidies for diesel importers.
- When
- Announced on October 9, 2026, ahead of the October 25 runoff.
- Where
- Brazil.
- Why
- The government said the measures aim to lower fuel prices and help keep fuel imports economically viable amid rising international prices.
Brazilian government
Flávio Bolsonaro
Purpose and impact
Brazilian government
The government said the measures would lower fuel prices and help ensure imports remain viable during a critical period for fuel supply.
Flávio Bolsonaro
Bolsonaro called the measure irresponsible and warned diesel prices could rise after the election.
The aim is to ensure that imports remain economically viable at a critical time for fuel supply
irresponsible
a time bomb that Lula is throwing at consumers
Lula and Flávio Bolsonaro contested the first round, in which Bolsonaro received about 2 million more votes, according to The Hindu.
The government announced gasoline tax cuts and expanded fuel subsidies, effective that day.
Voters are scheduled to choose between Lula and Bolsonaro in the presidential runoff.
- Gasoline tax exemption
- 30 days, with a possible extension
- Additional diesel subsidy
- 1.40 reais per liter for 30 days
- Existing diesel subsidy
- 2.12 reais per liter
- Runoff date
- October 25, 2026
- Diesel subsidy total
- 3.52 reais per liter while both subsidies apply
Sources
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