News
12/03/26
Brazil scraps tax on diesel amid Iran war
Sao Paulo, 12 March (Argus) — Brazil will eliminate its federal, VAT-like
PIS/Cofins tax levy on diesel imports and sales to mitigate the Iran war's
effect on oil prices, the government said on Thursday The measure will cut
prices by R0.32/liter (20.9¢/USG), the government said. The government will also
offer a subsidy of the same amount to producers and importers, thus generating a
relief of R0.64/liter to customers at the pumps, it said. "We are performing
economic engineering to prevent the effects of the irresponsibility of the war
from reaching the Brazilian population," Brazil's president Luiz Inacio da Lula
said when announcing the measure, adding that the country will do "everything
within its means" to make sure that the war "does not reach the pockets of
drivers and truckers". The war in Iran, started following US and Israeli attacks
on the country on 28 February , has spiked global oil prices, with Ice Brent
futures surging above $100/bl early on Thursday. Lula also said he hopes to
"count on the goodwill of state governors" to reduce state taxes for diesel as
well. The federal government will also create an export tax on oil to increase
domestic refining and guarantee domestic supply, as well as increase hydrocarbon
regulator ANP's overseeing of the fuel market in order to curb "abusive price
increases" and the "speculative retention of stocks with the aim of causing
scarcity or selling the product at higher prices". Members of the government
such as vice-president Geraldo Alckmin and chief of staff Rui Costa will meet
with representatives of Brazil's largest private fuel distributors to demand
that the measures are effectively passed onto final consumers, the government
said. It is unclear whether the government will extend the measure to other
products, such as base oils. By Lucas Parolin Send comments and request more
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