Brazil delays gasoline subsidy removal amid oil price surge

Finance Minister Dario Durigan announced that the government will postpone the planned termination of the R$ 0.44 per litre gasoline subsidy. The removal, originally scheduled for this week, will be re‑examined next week because crude oil prices rose to about US $80 per barrel following renewed attacks by the United States on Iran and heightened risk of a blockage in the Strait of Hormuz.

The subsidy, introduced to shield consumers from the impact of the Middle‑East conflict on fuel prices, costs roughly R$ 1.2 billion per month. The government says it will keep the aid while monitoring international oil markets to avoid inflationary pressure on food and other goods. The earlier partial removal of a diesel subsidy and the end of an ICMS exemption for diesel have already taken effect.

Meanwhile, the administration maintains its plan to increase the mandatory ethanol content in gasoline from 30 % to 32 % and to raise biodiesel blends, as outlined in the 2024 Fuel Future Law. The meeting of the National Council for Energy Policy (CNPE) that was to decide on the ethanol increase was also delayed due to the same geopolitical tensions.