Brazil Keeps Diesel Subsidy and Extends Gasoline Support Amid Rising Oil Prices

Brazil's Ministry of Planning and Budget, led by Minister Bruno Moretti, announced that the additional diesel subsidy of R$ 0.35 per litre will not be reinstated. Moretti said the recent rise in international oil prices has not yet created sufficient pressure on domestic fuel costs to justify restoring the benefit, adding, “Considering our price‑softening strategy, we see no justification to resume the R$ 0.35 subsidy at this time.”

The government will maintain the existing diesel subsidy of R$ 1.12 per litre, which costs about R$ 5.5 billion each month, and the gasoline subsidy of roughly R$ 1.3 billion per month. The Ministry of Finance, through Secretary Darío Durigan, formalised an extension of the gasoline subsidy that began on 26 July, after the original measure expired on 25 May. The subsidy is intended to shield consumers from price spikes linked to the Middle‑East conflict and higher crude oil prices. Petrobras has already raised gasoline prices at the refinery level, but the subsidy limited the increase passed on to consumers to about R$ 0.04 per litre.