Brazil to Extend Gasoline Subsidy for Another 30 Days as Brent Crude Tops $90
en.Wedoany.com Reported - On August 21, the Brazilian federal government is studying extending the gasoline subsidy of R$0.44 per liter for another 30 days. The subsidy, which was extended at the end of July, is set to expire on August 25, and the government's economic team is assessing the need to maintain the mechanism as international Brent crude oil prices remain at elevated levels.
Brent crude closed at $93.78 per barrel on August 20, marking its fifth consecutive trading day of gains. The market reaction is linked to tensions between the United States and Iran and the lack of progress in negotiations between the two countries. The government had previously hoped to gradually phase out the fuel subsidy established due to the Middle East conflict once oil prices retreated, but the renewed rise in Brent has hindered the exit plan.
The subsidy mechanism, in place since May 25, is paid directly by the National Agency of Petroleum, Natural Gas and Biofuels (ANP) to producers and importers, at a monthly cost of approximately R$1.2 billion. The subsidy of R$0.44 per liter corresponds to roughly half of the combined cap for federal taxes PIS, Cofins, and Cide (R$0.89/liter).
The new extension requires resolving the legal basis. Provisional Measure MP 1358/2026, which authorizes gasoline and diesel subsidies, expires on September 9; another path is to await the signing into law by the President of the supplementary fuel bill (PLP 114/2026), which was already approved by Congress last week, with the signing deadline set for September 3. On the diesel front, the subsidy of R$1.12 per liter was extended for 60 days on July 16 and is currently valid until September 13.
