The Brazilian government today announced a package of fiscal measures to cushion the domestic impact on consumers of rising international oil prices caused by the Middle East war.
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“This is a remedy for what is happening in Brazil and in the world, largely caused by the irresponsibility of wars in the world,” said Brazilian president Lula da Silva at an event in Brasília, adding that “the price of oil is spiralling out of control, which means rising fuel costs.”
“We are doing economic engineering to prevent the effects of the irresponsibility of wars from reaching the people. We will do everything possible,” he stressed.
The temporary measures include the elimination of two federal taxes on diesel. The government will also pay a subsidy to diesel producers and importers.
Finance minister Fernando Haddad explained at the presentation that the measures target diesel rather than petrol, as diesel is facing the greatest “pressure” in the current context. Haddad stressed that diesel is fundamental to the agricultural sector, which is preparing for a harvest expected to be historically large in volume.
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In addition to these fiscal measures, the government has decreed an export tax on fuel to encourage Brazilian refineries to operate at maximum capacity and guarantee domestic supply, as well as to offset the budgetary impact of the subsidies and the elimination of the other two taxes — estimated at 30 billion reais (around €4.99 billion).
The National Petroleum Agency will also be granted new powers to monitor price increases deemed “abusive,” as well as “speculative” stockpiling by distributors.
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SEO description: Brazil’s government has announced temporary fiscal measures including the elimination of two federal diesel taxes and producer subsidies, as president Lula da Silva vows to shield Brazilians from the impact of surging global oil prices driven by the Middle East war, at an estimated budget cost of €4.99 billion.
