en.Wedoany.com Reported - The Brazilian federal government will cancel the R$0.35 per liter diesel subsidy starting July 1, based on Provisional Measure No. 1,358/2026 issued in May. The cancellation was published on June 30 and appeared in the Federal Official Gazette the following day. The Ministry of Finance stated that this is the first time a fuel subsidy has been eliminated, and other subsidies for diesel and gasoline should also be suspended.
Finance Minister Dario Durigan said that another diesel subsidy (R$1.12 per liter) and the gasoline subsidy of R$0.44 per liter are being evaluated. The cancellation of the gasoline subsidy, at least gradually or partially, will be announced in the coming days when prices are more stable. He stated that the gradual removal of subsidies is synchronized with the stabilization of oil prices, following significant price pressures caused by the Iran war. Durigan also emphasized that the government's strategy has always been temporary, and some measures have already ended, such as those related to agreements with states initially planned for April and May.
Planning and Budget Minister Bruno Moretti noted that the gradual elimination of subsidies aligns with the government's fiscal neutrality premise. As oil prices fall, tax revenues related to the sector also decrease, requiring adjustments to measures to maintain the achievement of primary fiscal targets.
Petrobras Lowers Diesel Prices, but Consumers Feel No Benefit
Petrobras announced a R$0.35 per liter reduction in the sales price of Type A diesel to distributors. However, with the cancellation of the government subsidy, consumers will not feel the discount, and the final fuel price should remain unchanged, averaging R$3.30 per liter. Type A diesel is 100% fossil fuel and must be blended with biodiesel before being sold to retailers (gas stations). The company also stated that it has received an additional R$1.1 billion related to a new installment of the diesel sales economic subsidy program established under Provisional Measure No. 1,340/2026, covering the period from April 7 to 19, 2026. Petrobras said it has received approximately R$2 billion in diesel subsidies.
On the evening of June 30, the National Agency of Petroleum, Natural Gas and Biofuels (ANP) approved two resolutions at a special meeting, establishing criteria for identifying excessive fuel price increases. One regulation applies to liquid fuel and LPG retailers (gas stations), and the other applies to liquid fuel and LPG distributors. The approved criteria include: using gross margin as a parameter to identify abnormal pricing; comparing the gross margin of the same economic entity across different periods; and using a 70% increase in gross margin as an initial screening criterion during geopolitical conflicts and disasters—a standard based on international experience. In a statement, the ANP said the adopted resolutions preserve the free pricing system, without setting price caps or directly controlling profit margins.
