Brazil gasoline falls 1.46% in May, easing inflation

In May 2026 Brazil’s retail gasoline price fell 1.46%, making it the biggest single contributor to the 0.58% rise in the IPCA (consumer‑price index). The drop removed 0.08 percentage points from the month’s inflation tally. The price decline was driven by a 6.2% fall in ethanol costs, which heightened competition for flex‑fuel vehicles, and by a government fuel‑subsidy of R$0.44 per litre that offsets part of the tax burden on producers and importers.

Diesel also slipped 2.34% in the same period, further supporting the deflationary pressure on the index. The trend reverses the previous two‑month upward swing caused by disruptions in the global oil market after the Middle‑East conflict that pushed Brent crude above US$100 a barrel.

According to IBGE analyst Fernando Gonçalves, the combined effect of cheaper ethanol and the subsidy helped contain the impact of a recent Petrobras price increase of R$0.48 per litre, of which only R$0.04 was passed on to consumers.