Discontinued diesel subsidy cost R$2.7 billion in two months

In light of the reduction in geopolitical tensions in the Middle East, two measures announced by the Brazilian government to mitigate the effects of the war on fuel have already been discontinued. In total, the actions cost public coffers around R$2.7 billion, the Ministry of Finance told CNN Money.

At the end of June the federal government announced the end of the subsidy of R$ 0.35 per liter of diesel oil. The measure lasted a month.

The subsidy of R$0.35 per liter of diesel oil was implemented to replace the federal tax relief that expired at the beginning of June. To CNN Money, the Ministry of Finance reported that the measure cost R$1.7 billion.

Also as part of measures to mitigate the effects of the war, the government entered into a partnership with the states to allow a subsidy of R$1.20 on each liter of imported diesel. Of this total, R$0.60 was paid for by the Union.

The subsidy of R$ 1.20 ended on May 31st. The government estimates that it has spent around R$1 billion on the measure since April.

In addition to these, there are other measures in force. In May, President Luiz Inácio Lula da Silva (PT) published a decree to grant a subsidy of R$0.44 per liter of gasoline for two months.

A subsidy of R$ 1.12 cents per liter of road diesel sold by producers and importers in the country is also in force.

In total, the fuel subsidy measures adopted so far have a potential cost of around R$16 billion, considering the resources that have already been consumed or are being implemented and the potential cost of the decrees and provisional measures that are still in force.

The federal government is also considering removing the subsidy of R$0.44 per liter of gasoline in the coming days. According to the Ministry of Finance, the review of the measure will depend on the variation in the price of oil, which rose again last Wednesday (8).

Source: CNN