Eleven percent. That is how much the state tax on diesel will rise in Brazil in 2027, the biggest increase among the three fuels adjusted this week. Because diesel powers the trucks that carry food and goods across the country, the higher tax is likely to reach the wallet of anyone who buys groceries, even those who have never filled a truck's tank.

The National Council for Tax Policy (Confaz), which gathers the finance secretaries of Brazil's states, approved the adjustment on Tuesday (27), made official in the Federal Register on Wednesday (28), according to Gazeta Brasil. The new rates take effect on February 1, 2027. It is the third consecutive annual increase of the tax, according to G1.

The tax, known as ICMS, is charged as a fixed amount per liter or per kilogram. This is how the rates change:

• Gasoline: from R$ 1.57 to R$ 1.64 per liter, up 4.5%. Filling a 40-liter tank will cost R$ 2.80 more in state tax alone;
• Diesel: from R$ 1.17 to R$ 1.30 per liter, up 11.1%, or 13 cents more per liter;
• Cooking gas (LPG): from R$ 1.47 to R$ 1.54 per kilogram, up 4.8%. In practice, R$ 0.91 more on each 13-kilogram cylinder, the standard in Brazilian kitchens.

How the tax works

ICMS is a state-level tax and, since 2022, federal law requires it to be charged on fuels only once, as a fixed amount per liter, rather than as a percentage of the price. That amount is updated every year based on average prices measured by the National Petroleum Agency (ANP). For the 2027 adjustment, prices from February to September 2026 were compared with the same period in 2025.

The heavier burden on diesel worries the states themselves. Comsefaz, the committee of state finance secretaries, said in a statement that it is considering moving up a new review of the diesel tax because of instability in international oil prices.

"Given the scenario of global instability in the prices of oil derivatives, the states are monitoring and evaluating shortening the terms of the complementary law regarding the update of diesel values," Comsefaz said, according to Gazeta Brasil.

The announcement came on the same day the federal government renewed for another 30 days a subsidy of R$ 2.12 per liter of diesel, created to contain the rise in oil prices driven by the war in the Middle East, according to Gazeta Brasil. Since February, the government of President Luiz Inácio Lula da Silva has adopted subsidies and tax measures covering diesel, gasoline, cooking gas and aviation kerosene.