The federal government has extended the fuel tax exemption for another month to mitigate the impacts of international war on gasoline, ethanol, and diesel prices nationwide.
In an effort to shield Brazilian consumers’ wallets from international market volatility, the federal government announced a new round of tax cuts on essential energy matrix items this Friday (9).
The measure covers gasoline, ethanol, and diesel, with an extended validity of 30 days to confront the repercussions of geopolitical conflicts that continue to pressure global prices.
The Minister of Finance, Dario Durigan, explained that the strategy involves not only extending reduced tax rates but also reinforcing biofuel subsidy policies.
The main objective is to maintain predictability in domestic supply and prevent external shocks from being fully transferred to national inflation, a constant challenge for the country’s economic stability.
Monitoring and Pricing Strategy
According to the government, decisions are made based on daily monitoring of refining margins and fluctuations in Brent crude oil prices.
The Executive branch seeks a delicate balance between the need for revenue collection and the urgency of preserving the population’s purchasing power, using instruments like PIS/Cofins and Cide to control final prices at the pump.
Dario Durigan stated:
We have been monitoring price variations, not only Brent’s variations but also refining margins and price differences that have emerged.
Focus on Biofuels and Diesel
The tax exemption policy pays close attention to hydrous ethanol, aiming to strengthen the competitiveness of biofuels against fossil fuel derivatives.
This directive aligns with the country’s commitment to energy transition and follows strategic guidelines approved by the National Congress, which aim to incentivize alternatives less dependent on oil price volatility.
For diesel, the focus is on logistical security. By increasing economic subsidies, the government attempts to mitigate the impact of freight costs, which are essential for moving production and maintaining economic activity in various sectors dependent on road freight transport.
Inflation Under Scrutiny
To justify the effectiveness of the interventions, the ministry cited recent data from the IPCA (Broad Consumer Price Index), which closed September 2026 with a 12-month accumulated rate of 4.58%.
The government maintains that, despite the war scenario, the current index is lower than that recorded in 2022, a period that also suffered from strong international inflationary pressures.
Although the scenario demands caution, the extension of the tax exemption represents temporary relief for the market. The coming month will be decisive in assessing whether the prolongation of these measures will be sufficient to stabilize the cost of living for Brazilians or if further adjustments will be necessary as the global conflict evolves.
