Brazil approves plan to fund free public transport with oil royalties

Brazil's Chamber of Deputies Urban Development Committee approved Bill 3932/25, directing excess royalties from oil and natural‑gas production to subsidise a zero‑fare urban public‑transport system. The measure would allocate the portion of royalties that exceeds current distribution caps to municipalities for free transit, a move described by rapporteur Hildo Rocha as “enhancing public‑mobility policies.”

President Luiz Inácio Lula da Silva subsequently signed Law No. 15.432/2026, establishing a legal framework for collective public transport. The law modernises financing by allowing new sources such as advertising, commercial space exploitation and revenues from the CIDE fuel tax, while also opening discussion on zero‑fare schemes. Several presidential vetoes were applied to avoid mandatory fiscal burdens on states and municipalities and to preserve fiscal sustainability. The legislation also sets minimum quality standards for service and links operator remuneration to performance. Together, the legislative actions aim to expand free or discounted transport, improve service quality, and reduce emissions.