Brazil's federal government has already opened R$ 27.1 billion in extraordinary budget credits in 2026 to keep the international fuel price surge from reaching Brazilian gasoline and diesel prices in full, according to the UOL column by Paula Gama published on Saturday (12). That public money is what has been holding the liter at the pump since March, even with Brent crude back above US$ 100 a barrel. The tally grew days after Petrobras, the state-controlled oil company, canceled a gasoline price increase it had announced for its refineries; the newspaper O Globo, which reported the retreat, projects pump prices could fall by up to 2%.
Six credits opened since March make up the total: R$ 10 billion, R$ 550 million, R$ 3.33 billion, R$ 3.473 billion, R$ 3.152 billion and, this week, R$ 6.605 billion. The latest came in a provisional measure (a rule with the force of law that Congress must approve) that allocated R$ 5.607 billion to road diesel and R$ 998 million to the subsidy program for gasoline and diesel producers and importers. Not all of it has left the treasury: public data from the ANP, the agency that regulates fuels, show that only R$ 7.79 billion had actually been paid out by August 31.
What is an extraordinary budget credit?
An extraordinary credit is the authorization to spend beyond what the annual budget law allowed, normally used in emergencies. It works like a pre-approved card limit: it clears the spending before any bill is paid. That explains the gap between the R$ 27.1 billion opened and the R$ 7.79 billion disbursed, as the column explains: part of the money covers future periods, and part lapsed when earlier provisional measures expired.
What changes at the pump
Since May the model has been a subsidy: the government paid producers and importers, who had to deduct the amount from their sale price and prove the reduction to the ANP. For gasoline, the payment was about R$ 0.44 per liter, at an estimated cost of R$ 1.2 billion a month; for diesel, the estimate was R$ 1.7 billion a month. This week the design changed: gasoline left the subsidy for a R$ 0.63-per-liter cut in federal taxes, federal taxes on ethanol were zeroed, and diesel gained another R$ 1 per liter, on top of the R$ 1.12 in place until September 26.
On a 40-liter car tank, the gasoline cut alone means R$ 25.20 less per fill-up. President Luiz Inácio Lula da Silva signed the measures on Wednesday (9), less than a month before the presidential election, and the government estimates the new package at about R$ 7 billion a month, according to UOL. The ministers calculate that the fuel measures have already cost R$ 25 billion since they were announced, and Finance Ministry Executive Secretary Rogério Ceron said the R$ 2 billion in tax relief on gasoline and ethanol will be offset by more than R$ 10 billion in extra oil revenue this month, G1 reported.
The force behind the bill is the oil shock caused by the Middle East conflict, which pushed Brent back above US$ 100 this week. More than 25% of the diesel consumed in Brazil is imported, so exchange rates and international prices feed into freight costs and from there into food prices, the UOL column notes. "We will not allow this irresponsible war to reach your pocket, much less the food on the Brazilian people's table," Lula said in a video released on Wednesday.
The playbook differs from 2022, when Jair Bolsonaro, also in an election year, eased prices by cutting taxes: Supplementary Law 194 capped the state-level ICMS tax and the federal government zeroed PIS/Cofins and Cide levies. This time the expense shows up directly on the federal government's books, which pays the bill instead of giving up revenue. Economist Rodrigo Provazzi, quoted by the column, said the subsidy is "more complex to operate, less transparent to the public and more susceptible to risks of inefficiency".
Tax consultant Francisco Arrighi argues the cost only changes hands: "In the end, it is always the taxpayer who pays, either through future taxes or through currency depreciation". Provazzi calls the risk of withdrawing the benefit with oil still expensive the "rebound effect", a choice between spending more to keep the relief and watching prices jump. The R$ 27.1 billion already authorized this year shows how far the government has gone down the first path.