Brazilian government unlocks emergency credit to fund fuel subsidies

On September 9, Brazil's government enacted a provisional measure that creates an extraordinary credit to finance subsidies for petroleum-derived fuels. The credit will be transferred to the Ministry of Mines and Energy, and the National Agency of Petroleum, Natural Gas and Biofuels will manage its application. The bulk of the resources is earmarked for economic support to road diesel production and import, with a secondary allocation for gasoline and other fuel derivatives.

These subsidies were first introduced in May as a response to price pressures stemming from the conflict in the Middle East. While the diesel subsidy is set to continue until December 31, the provisional measure does not specify an end date for the overall program. Congress has up to 120 days to examine the measure before it can become law.