The Finance Ministry estimates the fiscal impact of extending the gasoline and ethanol tax breaks for 30 days at R$2.76 billion. The estimated cost of the subsidy for hydrous ethanol over the same period is R$813.41 million. According to the ministry, extraordinary federal oil revenues will offset the cost of the tax breaks.
The Brazilian government extended the measures until December 9, 2026, through a decree published in the Federal Official Gazette. According to the presidency, the aim is to prevent the inflationary impact of rising oil prices associated with the conflict in the Middle East.
The PIS/Pasep and Cofins tax rates on gasoline and hydrous ethanol remain at zero, as does the specific Cide tax rate on gasoline. According to the presidency, the reduction does not apply to aviation gasoline.
The subsidy of R$0.428 per liter of hydrous ethanol will be paid to producers and cooperatives of producers of biofuels intended for final consumption. The Finance Ministry may extend the deadline. According to the presidency, the subsidy aims to preserve the competitive advantage of biofuels.
