Brazil eliminates federal gasoline taxes, adds diesel subsidy in R$5.2B package

Brazil's federal government removed PIS/Cofins and Cide taxes on gasoline, raising the exemption from R$0.63 to R$0.89 per liter, while maintaining ethanol's full exemption and adding a new subsidy for imported diesel. The 30-day fiscal impact is R$5.2 billion, R$2.7 billion above prior measures, signaling an acceleration of fuel-price intervention ahead of elections. This shifts fiscal burden to the budget and pressures inflation expectations, though the direct market effect is limited to Brazilian energy and fiscal dynamics.